Correlation Between Grocery Outlet and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling, you can compare the effects of market volatilities on Grocery Outlet and AKITA Drilling 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 AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and AKITA Drilling.
Diversification Opportunities for Grocery Outlet and AKITA Drilling
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grocery and AKITA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling 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 AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and AKITA Drilling go up and down completely randomly.
Pair Corralation between Grocery Outlet and AKITA Drilling
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 2.52 times more return on investment than AKITA Drilling. However, Grocery Outlet is 2.52 times more volatile than AKITA Drilling. It trades about 0.54 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.01 per unit of risk. If you would invest 1,441 in Grocery Outlet Holding on September 3, 2024 and sell it today you would earn a total of 659.00 from holding Grocery Outlet Holding or generate 45.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Grocery Outlet Holding vs. AKITA Drilling
Performance |
| Timeline |
| Grocery Outlet Holding |
| AKITA Drilling |
Grocery Outlet and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and AKITA Drilling
The main advantage of trading using opposite Grocery Outlet and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
| AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc | AKITA Drilling vs. Borr Drilling | AKITA Drilling vs. SCOR PK |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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