Correlation Between Coles and Ingles Markets

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

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

Diversification Opportunities for Coles and Ingles Markets

0.0

Correlation Coefficient

Coles  Ingles Markets

Pay attention - limited upside

The 3 months correlation between Coles and Ingles is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coles Group and Ingles Markets Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingles Markets and Coles 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 Coles Group 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 Coles i.e., Coles and Ingles Markets go up and down completely randomly.

Pair Corralation between Coles and Ingles Markets

If you would invest  6,354  in Ingles Markets Incorporated on December 29, 2024 and sell it today you would earn a total of  25.00  from holding Ingles Markets Incorporated or generate 0.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Coles Group  vs.  Ingles Markets Incorporated

Coles Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coles Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Coles is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 somewhat strong basic indicators, Ingles Markets is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Coles and Ingles Markets

The main advantage of trading using opposite Coles and Ingles Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coles 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 Coles Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.