Correlation Between Ingles Markets and Weis Markets

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

Diversification Opportunities for Ingles Markets and Weis Markets

-0.43

Correlation Coefficient

Ingles Markets  Weis Markets

Very good diversification

The 3 months correlation between Ingles and Weis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets 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 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 Ingles Markets i.e., Ingles Markets and Weis Markets go up and down completely randomly.

Pair Corralation between Ingles Markets and Weis Markets

Assuming the 90 days horizon Ingles Markets Incorporated is expected to under-perform the Weis Markets. But the stock apears to be less risky and, when comparing its historical volatility, Ingles Markets Incorporated is 1.09 times less risky than Weis Markets. The stock trades about -0.01 of its potential returns per unit of risk. The Weis Markets is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  6,638  in Weis Markets on January 5, 2025 and sell it today you would earn a total of  1,134  from holding Weis Markets or generate 17.08% return on investment over 90 days.

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

Ingles Markets Incorporated  vs.  Weis Markets

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.

Weis Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Weis Markets are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Weis Markets disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ingles Markets and Weis Markets

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

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.