Correlation Between Missfresh and Natural Grocers

Can any of the company-specific risk be diversified away by investing in both Missfresh and Natural Grocers 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 Missfresh and Natural Grocers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Missfresh Ltd ADR and Natural Grocers by, you can compare the effects of market volatilities on Missfresh and Natural Grocers 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 Missfresh with a short position of Natural Grocers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Missfresh and Natural Grocers.

Diversification Opportunities for Missfresh and Natural Grocers

-0.4

Correlation Coefficient

Missfresh  Natural Grocers

Very good diversification

The 3 months correlation between Missfresh and Natural is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Missfresh Ltd ADR and Natural Grocers by in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Grocers by and Missfresh 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 Missfresh Ltd ADR are associated (or correlated) with Natural Grocers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Grocers by has no effect on the direction of Missfresh i.e., Missfresh and Natural Grocers go up and down completely randomly.

Pair Corralation between Missfresh and Natural Grocers

If you would invest  2,652  in Natural Grocers by on August 30, 2024 and sell it today you would earn a total of  1,969  from holding Natural Grocers by or generate 74.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Missfresh Ltd ADR  vs.  Natural Grocers by

Missfresh ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Missfresh Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Missfresh is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Natural Grocers by

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Natural Grocers by are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Natural Grocers exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Missfresh and Natural Grocers

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

The idea behind Missfresh Ltd ADR and Natural Grocers by 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.