Correlation Between Ingles Markets and Seven I

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

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

Diversification Opportunities for Ingles Markets and Seven I

0.4

Correlation Coefficient

Ingles Markets  Seven I

Very weak diversification

The 3 months correlation between Ingles and Seven is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated and Seven i Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven i Holdings and Ingles Markets 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 Ingles Markets Incorporated are associated (or correlated) with Seven I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven i Holdings has no effect on the direction of Ingles Markets i.e., Ingles Markets and Seven I go up and down completely randomly.

Pair Corralation between Ingles Markets and Seven I

Assuming the 90 days horizon Ingles Markets is expected to generate 19.12 times less return on investment than Seven I. But when comparing it to its historical volatility, Ingles Markets Incorporated is 1.23 times less risky than Seven I. It trades about 0.0 of its potential returns per unit of risk. Seven i Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,562  in Seven i Holdings on September 12, 2024 and sell it today you would earn a total of  113.00  from holding Seven i Holdings or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Ingles Markets Incorporated  vs.  Seven i Holdings

Ingles Markets

Risk-Adjusted Performance

0 of 100

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.

Seven i Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seven i Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Seven I may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ingles Markets and Seven I

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

The idea behind Ingles Markets Incorporated and Seven i Holdings 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 Stocks Directory module to find actively traded stocks across global markets.