Correlation Between Grocery Outlet and Arhaus
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Arhaus 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 Arhaus 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 Arhaus Inc, you can compare the effects of market volatilities on Grocery Outlet and Arhaus 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 Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Arhaus.
Diversification Opportunities for Grocery Outlet and Arhaus
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grocery and Arhaus is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Arhaus go up and down completely randomly.
Pair Corralation between Grocery Outlet and Arhaus
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Arhaus. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.46 times less risky than Arhaus. The stock trades about -0.02 of its potential returns per unit of risk. The Arhaus Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 942.00 in Arhaus Inc on September 12, 2024 and sell it today you would earn a total of 171.00 from holding Arhaus Inc or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Arhaus Inc
Performance |
| Timeline |
| Grocery Outlet Holding |
| Arhaus Inc |
Grocery Outlet and Arhaus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Arhaus
The main advantage of trading using opposite Grocery Outlet and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' 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 |
| Arhaus vs. Victory Integrity Smallmid Cap | Arhaus vs. Hilton Worldwide Holdings | Arhaus vs. NVIDIA | Arhaus vs. JPMorgan Chase Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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