Correlation Between Grocery Outlet and Nebius Group

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

Diversification Opportunities for Grocery Outlet and Nebius Group

0.44

Correlation Coefficient

Grocery Outlet  Nebius Group

Very weak diversification

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

Pair Corralation between Grocery Outlet and Nebius Group

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Nebius Group. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 3.19 times less risky than Nebius Group. The stock trades about -0.39 of its potential returns per unit of risk. The Nebius Group NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,349  in Nebius Group NV on September 25, 2024 and sell it today you would earn a total of  322.00  from holding Nebius Group NV or generate 13.71% return on investment over 90 days.

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

Grocery Outlet Holding  vs.  Nebius Group NV

Grocery Outlet Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grocery Outlet Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Grocery Outlet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nebius Group NV

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nebius Group NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Nebius Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grocery Outlet and Nebius Group

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

The idea behind Grocery Outlet Holding and Nebius Group NV 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.