Correlation Between Albertsons Companies and Ingles Markets

Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Ingles 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 Albertsons Companies and Ingles Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Albertsons Companies and Ingles Markets Incorporated, you can compare the effects of market volatilities on Albertsons Companies and Ingles 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 Albertsons Companies with a short position of Ingles Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Ingles Markets.

Diversification Opportunities for Albertsons Companies and Ingles Markets

-0.55

Correlation Coefficient

Albertsons Companies  Ingles Markets

Excellent diversification

The 3 months correlation between Albertsons and Ingles is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Ingles Markets Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingles Markets and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Ingles Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingles Markets has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Ingles Markets go up and down completely randomly.

Pair Corralation between Albertsons Companies and Ingles Markets

Considering the 90-day investment horizon Albertsons Companies is expected to generate 1.09 times more return on investment than Ingles Markets. However, Albertsons Companies is 1.09 times more volatile than Ingles Markets Incorporated. It trades about 0.05 of its potential returns per unit of risk. Ingles Markets Incorporated is currently generating about -0.15 per unit of risk. If you would invest  1,970  in Albertsons Companies on November 28, 2024 and sell it today you would earn a total of  73.00  from holding Albertsons Companies or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Albertsons Companies  vs.  Ingles Markets Incorporated

Albertsons Companies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Albertsons Companies is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Ingles Markets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ingles Markets Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Albertsons Companies and Ingles Markets

The main advantage of trading using opposite Albertsons Companies and Ingles Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Ingles 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 Ingles Markets will offset losses from the drop in Ingles Markets' long position.

The idea behind Albertsons Companies and Ingles Markets Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.