Correlation Between Seven I and Weis Markets

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

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

Diversification Opportunities for Seven I and Weis Markets

0.46

Correlation Coefficient

Seven I  Weis Markets

Very weak diversification

The 3 months correlation between Seven and Weis is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Seven I 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 Seven i Holdings 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 Seven I i.e., Seven I and Weis Markets go up and down completely randomly.

Pair Corralation between Seven I and Weis Markets

Assuming the 90 days horizon Seven i Holdings is expected to generate 1.42 times more return on investment than Weis Markets. However, Seven I is 1.42 times more volatile than Weis Markets. It trades about 0.24 of its potential returns per unit of risk. Weis Markets is currently generating about 0.2 per unit of risk. If you would invest  1,440  in Seven i Holdings on September 5, 2024 and sell it today you would earn a total of  291.00  from holding Seven i Holdings or generate 20.21% return on investment over 90 days.

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

Seven i Holdings  vs.  Weis Markets

Seven i Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seven i Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Seven I showed solid returns over the last few months and may actually be approaching a breakup point.

Weis Markets

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weis Markets are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent primary indicators, Weis Markets may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Seven I and Weis Markets

The main advantage of trading using opposite Seven I and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I 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 Seven i Holdings 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.