Correlation Between Target and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Target and Weis Markets at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Target and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Weis Markets, you can compare the effects of market volatilities on Target and Weis Markets and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Target with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Weis Markets.
Diversification Opportunities for Target and Weis Markets
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Target and Weis is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Target and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Target is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Target are associated (or correlated) with Weis Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weis Markets has no effect on the direction of Target i.e., Target and Weis Markets go up and down completely randomly.
Pair Corralation between Target and Weis Markets
Considering the 90-day investment horizon Target is expected to under-perform the Weis Markets. But the stock apears to be less risky and, when comparing its historical volatility, Target is 1.1 times less risky than Weis Markets. The stock trades about -0.17 of its potential returns per unit of risk. The Weis Markets is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,317 in Weis Markets on January 25, 2024 and sell it today you would earn a total of 117.00 from holding Weis Markets or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Weis Markets
Performance |
| Timeline |
| Target |
| Weis Markets |
Target and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Weis Markets
The main advantage of trading using opposite Target and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, Weis Markets can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Weis Markets will offset losses from the drop in Weis Markets' long position.| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |