Correlation Between Grocery Outlet and Serina Therapeutics

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

Diversification Opportunities for Grocery Outlet and Serina Therapeutics

-0.56

Correlation Coefficient

Grocery Outlet  Serina Therapeutics

Excellent diversification

The 3 months correlation between Grocery and Serina is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Grocery Outlet and Serina Therapeutics

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 0.42 times more return on investment than Serina Therapeutics. However, Grocery Outlet Holding is 2.39 times less risky than Serina Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Serina Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  1,430  in Grocery Outlet Holding on October 1, 2024 and sell it today you would earn a total of  117.00  from holding Grocery Outlet Holding or generate 8.18% return on investment over 90 days.

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

Grocery Outlet Holding  vs.  Serina Therapeutics

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 latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Grocery Outlet and Serina Therapeutics

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

The idea behind Grocery Outlet Holding and Serina Therapeutics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.