Correlation Between Maison Solutions and Weis Markets

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

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

Diversification Opportunities for Maison Solutions and Weis Markets

0.31

Correlation Coefficient

Maison Solutions  Weis Markets

Weak diversification

The 3 months correlation between Maison and Weis is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Maison Solutions and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Maison Solutions 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 Maison Solutions 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 Maison Solutions i.e., Maison Solutions and Weis Markets go up and down completely randomly.

Pair Corralation between Maison Solutions and Weis Markets

Considering the 90-day investment horizon Maison Solutions is expected to under-perform the Weis Markets. In addition to that, Maison Solutions is 3.11 times more volatile than Weis Markets. It trades about -0.2 of its total potential returns per unit of risk. Weis Markets is currently generating about -0.01 per unit of volatility. If you would invest  6,386  in Weis Markets on January 29, 2024 and sell it today you would lose (20.00) from holding Weis Markets or give up 0.31% of portfolio value over 90 days.

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

Maison Solutions  vs.  Weis Markets

Maison Solutions

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maison Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Maison Solutions unveiled 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 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.

Pair Trading with Maison Solutions and Weis Markets

The main advantage of trading using opposite Maison Solutions and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maison Solutions 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 Maison Solutions 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.