Correlation Between Weis Markets and Sendas Distribuidora

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

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

Diversification Opportunities for Weis Markets and Sendas Distribuidora

-0.01

Correlation Coefficient

Weis Markets  Sendas Distribuidora

Good diversification

The 3 months correlation between Weis and Sendas is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora and Weis 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 Weis Markets are associated (or correlated) with Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Weis Markets i.e., Weis Markets and Sendas Distribuidora go up and down completely randomly.

Pair Corralation between Weis Markets and Sendas Distribuidora

Considering the 90-day investment horizon Weis Markets is expected to generate 0.56 times more return on investment than Sendas Distribuidora. However, Weis Markets is 1.78 times less risky than Sendas Distribuidora. It trades about 0.07 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.08 per unit of risk. If you would invest  6,727  in Weis Markets on August 30, 2024 and sell it today you would earn a total of  552.00  from holding Weis Markets or generate 8.21% return on investment over 90 days.

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

Weis Markets  vs.  Sendas Distribuidora SA

Weis Markets

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weis Markets are ranked lower than 5 (%) 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 December 2024.

Sendas Distribuidora

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sendas Distribuidora SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Weis Markets and Sendas Distribuidora

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

The idea behind Weis Markets and Sendas Distribuidora SA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.