Correlation Between Grocery Outlet and 82967NBL1

Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and 82967NBL1 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 82967NBL1 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 US82967NBL10, you can compare the effects of market volatilities on Grocery Outlet and 82967NBL1 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 82967NBL1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and 82967NBL1.

Diversification Opportunities for Grocery Outlet and 82967NBL1

-0.05

Correlation Coefficient

Grocery Outlet  82967NBL1

Good diversification

The 3 months correlation between Grocery and 82967NBL1 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and US82967NBL10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US82967NBL10 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 82967NBL1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US82967NBL10 has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and 82967NBL1 go up and down completely randomly.

Pair Corralation between Grocery Outlet and 82967NBL1

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the 82967NBL1. In addition to that, Grocery Outlet is 6.02 times more volatile than US82967NBL10. It trades about -0.03 of its total potential returns per unit of risk. US82967NBL10 is currently generating about 0.03 per unit of volatility. If you would invest  8,936  in US82967NBL10 on September 24, 2024 and sell it today you would earn a total of  516.00  from holding US82967NBL10 or generate 5.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.59%
Values	Daily Returns

Grocery Outlet Holding  vs.  US82967NBL10

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 uncertain basic indicators, Grocery Outlet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

US82967NBL10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US82967NBL10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 82967NBL1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grocery Outlet and 82967NBL1

The main advantage of trading using opposite Grocery Outlet and 82967NBL1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, 82967NBL1 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 82967NBL1 will offset losses from the drop in 82967NBL1's long position.

The idea behind Grocery Outlet Holding and US82967NBL10 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.