Correlation Between Albertsons Companies and Winsome Resources

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

By analyzing existing cross correlation between Albertsons Companies and Winsome Resources Limited, you can compare the effects of market volatilities on Albertsons Companies and Winsome Resources 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 Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Winsome Resources.

Diversification Opportunities for Albertsons Companies and Winsome Resources

-0.23

Correlation Coefficient

Albertsons Companies  Winsome Resources

Very good diversification

The 3 months correlation between Albertsons and Winsome is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome Resources 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Winsome Resources go up and down completely randomly.

Pair Corralation between Albertsons Companies and Winsome Resources

Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.18 times more return on investment than Winsome Resources. However, Albertsons Companies is 5.55 times less risky than Winsome Resources. It trades about -0.02 of its potential returns per unit of risk. Winsome Resources Limited is currently generating about -0.04 per unit of risk. If you would invest  1,888  in Albertsons Companies on September 12, 2024 and sell it today you would lose (37.00) from holding Albertsons Companies or give up 1.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Albertsons Companies  vs.  Winsome Resources Limited

Albertsons Companies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Albertsons Companies has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Winsome Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winsome Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Albertsons Companies and Winsome Resources

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

The idea behind Albertsons Companies and Winsome Resources Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.