Correlation Between Grocery Outlet and Ioneer

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

Diversification Opportunities for Grocery Outlet and Ioneer

-0.25

Correlation Coefficient

Grocery Outlet  Ioneer

Very good diversification

The 3 months correlation between Grocery and Ioneer is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and ioneer Ltd American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer American 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 Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer American has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Ioneer go up and down completely randomly.

Pair Corralation between Grocery Outlet and Ioneer

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Ioneer. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.05 times less risky than Ioneer. The stock trades about -0.24 of its potential returns per unit of risk. The ioneer Ltd American is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  455.00  in ioneer Ltd American on October 8, 2024 and sell it today you would lose (34.00) from holding ioneer Ltd American or give up 7.47% of portfolio value over 90 days.

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

Grocery Outlet Holding  vs.  ioneer Ltd American

Grocery Outlet Holding

Risk-Adjusted Performance

0 of 100

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 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.

ioneer American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ioneer Ltd American 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 invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Grocery Outlet and Ioneer

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

The idea behind Grocery Outlet Holding and ioneer Ltd American 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.