Correlation Between Grocery Outlet and 65339KCH1

Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and 65339KCH1 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 65339KCH1 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 NEE 4625 15 JUL 27, you can compare the effects of market volatilities on Grocery Outlet and 65339KCH1 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 65339KCH1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and 65339KCH1.

Diversification Opportunities for Grocery Outlet and 65339KCH1

0.04

Correlation Coefficient

Grocery Outlet  65339KCH1

Significant diversification

The 3 months correlation between Grocery and 65339KCH1 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and NEE 4625 15 JUL 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEE 4625 15 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 65339KCH1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEE 4625 15 has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and 65339KCH1 go up and down completely randomly.

Pair Corralation between Grocery Outlet and 65339KCH1

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the 65339KCH1. In addition to that, Grocery Outlet is 15.22 times more volatile than NEE 4625 15 JUL 27. It trades about -0.24 of its total potential returns per unit of risk. NEE 4625 15 JUL 27 is currently generating about -0.04 per unit of volatility. If you would invest  10,036  in NEE 4625 15 JUL 27 on October 10, 2024 and sell it today you would lose (17.00) from holding NEE 4625 15 JUL 27 or give up 0.17% of portfolio value over 90 days.

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

Grocery Outlet Holding  vs.  NEE 4625 15 JUL 27

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 February 2025.

NEE 4625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEE 4625 15 JUL 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 65339KCH1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grocery Outlet and 65339KCH1

The main advantage of trading using opposite Grocery Outlet and 65339KCH1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, 65339KCH1 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 65339KCH1 will offset losses from the drop in 65339KCH1's long position.

The idea behind Grocery Outlet Holding and NEE 4625 15 JUL 27 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.