Correlation Between Carrefour and Natural Grocers
Can any of the company-specific risk be diversified away by investing in both Carrefour 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 Carrefour and Natural Grocers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA and Natural Grocers by, you can compare the effects of market volatilities on Carrefour 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 Carrefour with a short position of Natural Grocers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Natural Grocers.
Diversification Opportunities for Carrefour and Natural Grocers
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carrefour and Natural is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA 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 Carrefour 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 Carrefour SA 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 Carrefour i.e., Carrefour and Natural Grocers go up and down completely randomly.
Pair Corralation between Carrefour and Natural Grocers
Assuming the 90 days horizon Carrefour is expected to generate 23.13 times less return on investment than Natural Grocers. But when comparing it to its historical volatility, Carrefour SA is 8.36 times less risky than Natural Grocers. It trades about 0.16 of its potential returns per unit of risk. Natural Grocers by is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Natural Grocers by on August 28, 2024 and sell it today you would earn a total of 1,937 from holding Natural Grocers by or generate 71.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carrefour SA vs. Natural Grocers by
Performance |
| Timeline |
| Carrefour SA |
| Natural Grocers by |
Carrefour and Natural Grocers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and Natural Grocers
The main advantage of trading using opposite Carrefour and Natural Grocers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour 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.| Carrefour vs. Natural Grocers by | Carrefour vs. Grocery Outlet Holding | Carrefour vs. Village Super Market | Carrefour vs. Ingles Markets Incorporated |
| Natural Grocers vs. Innovative Food Hldg | Natural Grocers vs. Calavo Growers | Natural Grocers vs. The Chefs Warehouse | Natural Grocers vs. AMCON Distributing |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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