Correlation Between Grocery Outlet and Intelligent Group

Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Intelligent Group 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 Intelligent Group 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 Intelligent Group Limited, you can compare the effects of market volatilities on Grocery Outlet and Intelligent Group 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 Intelligent Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Intelligent Group.

Diversification Opportunities for Grocery Outlet and Intelligent Group

0.44

Correlation Coefficient

Grocery Outlet  Intelligent Group

Very weak diversification

The 3 months correlation between Grocery and Intelligent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Intelligent Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Group 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 Intelligent Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Group has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Intelligent Group go up and down completely randomly.

Pair Corralation between Grocery Outlet and Intelligent Group

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 0.79 times more return on investment than Intelligent Group. However, Grocery Outlet Holding is 1.27 times less risky than Intelligent Group. It trades about -0.04 of its potential returns per unit of risk. Intelligent Group Limited is currently generating about -0.06 per unit of risk. If you would invest  1,571  in Grocery Outlet Holding on December 21, 2024 and sell it today you would lose (323.00) from holding Grocery Outlet Holding or give up 20.56% of portfolio value over 90 days.

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

Grocery Outlet Holding  vs.  Intelligent Group Limited

Grocery Outlet Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grocery Outlet Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Intelligent Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intelligent Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in April 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Pair Trading with Grocery Outlet and Intelligent Group

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

The idea behind Grocery Outlet Holding and Intelligent Group Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.