Correlation Between Equinix and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Equinix and Grocery Outlet 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 Equinix and Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Grocery Outlet Holding, you can compare the effects of market volatilities on Equinix and Grocery Outlet 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 Equinix with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Grocery Outlet.
Diversification Opportunities for Equinix and Grocery Outlet
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equinix and Grocery is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding and Equinix 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 Equinix are associated (or correlated) with Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Equinix i.e., Equinix and Grocery Outlet go up and down completely randomly.
Pair Corralation between Equinix and Grocery Outlet
Given the investment horizon of 90 days Equinix is expected to generate 0.31 times more return on investment than Grocery Outlet. However, Equinix is 3.27 times less risky than Grocery Outlet. It trades about 0.26 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about 0.05 per unit of risk. If you would invest 80,986 in Equinix on August 28, 2024 and sell it today you would earn a total of 16,449 from holding Equinix or generate 20.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. Grocery Outlet Holding
Performance |
| Timeline |
| Equinix |
| Grocery Outlet Holding |
Equinix and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Grocery Outlet
The main advantage of trading using opposite Equinix and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's long position.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
| Grocery Outlet vs. Innovative Food Hldg | Grocery Outlet vs. Calavo Growers | Grocery Outlet vs. The Chefs Warehouse | Grocery Outlet 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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