Correlation Between Grocery Outlet and TAISEM

Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and TAISEM 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 TAISEM 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 TAISEM 4125 22 APR 29, you can compare the effects of market volatilities on Grocery Outlet and TAISEM 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 TAISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and TAISEM.

Diversification Opportunities for Grocery Outlet and TAISEM

-0.4

Correlation Coefficient

Grocery Outlet  TAISEM

Very good diversification

The 3 months correlation between Grocery and TAISEM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and TAISEM 4125 22 APR 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAISEM 4125 22 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 TAISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAISEM 4125 22 has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and TAISEM go up and down completely randomly.

Pair Corralation between Grocery Outlet and TAISEM

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the TAISEM. In addition to that, Grocery Outlet is 7.85 times more volatile than TAISEM 4125 22 APR 29. It trades about -0.01 of its total potential returns per unit of risk. TAISEM 4125 22 APR 29 is currently generating about 0.12 per unit of volatility. If you would invest  9,487  in TAISEM 4125 22 APR 29 on December 30, 2024 and sell it today you would earn a total of  292.00  from holding TAISEM 4125 22 APR 29 or generate 3.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.29%
Values	Daily Returns

Grocery Outlet Holding  vs.  TAISEM 4125 22 APR 29

Grocery Outlet Holding

Risk-Adjusted Performance

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.

TAISEM 4125 22

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TAISEM 4125 22 APR 29 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TAISEM 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 TAISEM

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

The idea behind Grocery Outlet Holding and TAISEM 4125 22 APR 29 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.