Correlation Between Grocery Outlet and MYT Netherlands

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

Diversification Opportunities for Grocery Outlet and MYT Netherlands

-0.39

Correlation Coefficient

Grocery Outlet  MYT Netherlands

Very good diversification

The 3 months correlation between Grocery and MYT is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and MYT Netherlands Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYT Netherlands Parent 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 MYT Netherlands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYT Netherlands Parent has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and MYT Netherlands go up and down completely randomly.

Pair Corralation between Grocery Outlet and MYT Netherlands

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the MYT Netherlands. In addition to that, Grocery Outlet is 1.11 times more volatile than MYT Netherlands Parent. It trades about -0.05 of its total potential returns per unit of risk. MYT Netherlands Parent is currently generating about 0.09 per unit of volatility. If you would invest  714.00  in MYT Netherlands Parent on December 18, 2024 and sell it today you would earn a total of  150.00  from holding MYT Netherlands Parent or generate 21.01% return on investment over 90 days.

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

Grocery Outlet Holding  vs.  MYT Netherlands Parent

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.

MYT Netherlands Parent

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grocery Outlet and MYT Netherlands

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

The idea behind Grocery Outlet Holding and MYT Netherlands Parent 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.