Correlation Between Grocery Outlet and Agape ATP

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

By analyzing existing cross correlation between Grocery Outlet Holding and Agape ATP, you can compare the effects of market volatilities on Grocery Outlet and Agape ATP 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 Grocery Outlet with a short position of Agape ATP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Agape ATP.

Diversification Opportunities for Grocery Outlet and Agape ATP

0.09

Correlation Coefficient

Grocery Outlet  Agape ATP

Significant diversification

The 3 months correlation between Grocery and Agape is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Agape ATP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agape ATP and Grocery Outlet 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 Grocery Outlet Holding are associated (or correlated) with Agape ATP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agape ATP has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Agape ATP go up and down completely randomly.

Pair Corralation between Grocery Outlet and Agape ATP

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Agape ATP. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 2.11 times less risky than Agape ATP. The stock trades about -0.23 of its potential returns per unit of risk. The Agape ATP is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  142.00  in Agape ATP on October 9, 2024 and sell it today you would lose (19.00) from holding Agape ATP or give up 13.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Grocery Outlet Holding  vs.  Agape ATP

Grocery Outlet Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grocery Outlet Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Grocery Outlet is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Agape ATP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agape ATP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Grocery Outlet and Agape ATP

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

The idea behind Grocery Outlet Holding and Agape ATP 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.