Correlation Between Grocery Outlet and N2OFF

Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and N2OFF 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 N2OFF 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 N2OFF Inc, you can compare the effects of market volatilities on Grocery Outlet and N2OFF 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 N2OFF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and N2OFF.

Diversification Opportunities for Grocery Outlet and N2OFF

-0.33

Correlation Coefficient

Grocery Outlet  N2OFF

Very good diversification

The 3 months correlation between Grocery and N2OFF is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and N2OFF Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N2OFF Inc 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 N2OFF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N2OFF Inc has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and N2OFF go up and down completely randomly.

Pair Corralation between Grocery Outlet and N2OFF

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the N2OFF. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 11.82 times less risky than N2OFF. The stock trades about -0.02 of its potential returns per unit of risk. The N2OFF Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  30.00  in N2OFF Inc on October 26, 2024 and sell it today you would earn a total of  87.00  from holding N2OFF Inc or generate 290.0% 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.  N2OFF Inc

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.

N2OFF Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in N2OFF Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, N2OFF displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grocery Outlet and N2OFF

The main advantage of trading using opposite Grocery Outlet and N2OFF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, N2OFF 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 N2OFF will offset losses from the drop in N2OFF's long position.

The idea behind Grocery Outlet Holding and N2OFF Inc 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.