Correlation Between Weis Markets and SpartanNash

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

By analyzing existing cross correlation between Weis Markets and SpartanNash Co, you can compare the effects of market volatilities on Weis Markets and SpartanNash 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 SpartanNash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weis Markets and SpartanNash.

Diversification Opportunities for Weis Markets and SpartanNash

-0.71

Correlation Coefficient

Weis Markets  SpartanNash

Pay attention - limited upside

The 3 months correlation between Weis and SpartanNash is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash 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 SpartanNash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpartanNash has no effect on the direction of Weis Markets i.e., Weis Markets and SpartanNash go up and down completely randomly.

Pair Corralation between Weis Markets and SpartanNash

Considering the 90-day investment horizon Weis Markets is expected to under-perform the SpartanNash. But the stock apears to be less risky and, when comparing its historical volatility, Weis Markets is 1.11 times less risky than SpartanNash. The stock trades about -0.14 of its potential returns per unit of risk. The SpartanNash Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,854  in SpartanNash Co on September 23, 2024 and sell it today you would earn a total of  86.00  from holding SpartanNash Co or generate 4.64% return on investment over 90 days.

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

Weis Markets  vs.  SpartanNash Co

Weis Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Weis Markets are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, Weis Markets is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

SpartanNash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SpartanNash Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Weis Markets and SpartanNash

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

The idea behind Weis Markets and SpartanNash Co 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.