Correlation Between Albertsons Companies and Ocado Group
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Ocado Group 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 Albertsons Companies and Ocado Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Ocado Group plc, you can compare the effects of market volatilities on Albertsons Companies and Ocado Group 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 Albertsons Companies with a short position of Ocado Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Ocado Group.
Diversification Opportunities for Albertsons Companies and Ocado Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albertsons and Ocado is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Ocado Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocado Group plc and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Ocado Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocado Group plc has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Ocado Group go up and down completely randomly.
Pair Corralation between Albertsons Companies and Ocado Group
Considering the 90-day investment horizon Albertsons Companies is expected to under-perform the Ocado Group. But the stock apears to be less risky and, when comparing its historical volatility, Albertsons Companies is 4.68 times less risky than Ocado Group. The stock trades about 0.0 of its potential returns per unit of risk. The Ocado Group plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 850.00 in Ocado Group plc on August 27, 2024 and sell it today you would lose (97.00) from holding Ocado Group plc or give up 11.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Ocado Group plc
Performance |
| Timeline |
| Albertsons Companies |
| Ocado Group plc |
Albertsons Companies and Ocado Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Ocado Group
The main advantage of trading using opposite Albertsons Companies and Ocado Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Ocado Group 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 Ocado Group will offset losses from the drop in Ocado Group's long position.| Albertsons Companies vs. Innovative Food Hldg | Albertsons Companies vs. Calavo Growers | Albertsons Companies vs. The Chefs Warehouse | Albertsons Companies vs. AMCON Distributing |
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Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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