Correlation Between Coles and Weis Markets

Can any of the company-specific risk be diversified away by investing in both Coles 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 Coles and Weis 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 Weis Markets, you can compare the effects of market volatilities on Coles 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 Coles with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coles and Weis Markets.

Diversification Opportunities for Coles and Weis Markets

0.0

Correlation Coefficient

Coles  Weis Markets

Pay attention - limited upside

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

Pair Corralation between Coles and Weis Markets

If you would invest  6,778  in Weis Markets on December 27, 2024 and sell it today you would earn a total of  776.00  from holding Weis Markets or generate 11.45% return on investment over 90 days.

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

Coles Group  vs.  Weis Markets

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.

Weis Markets

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Weis Markets are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Weis Markets may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Coles and Weis Markets

The main advantage of trading using opposite Coles and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coles 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.

The idea behind Coles Group and Weis Markets 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.