Correlation Between Grocery Outlet and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Axalta Coating 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 Axalta Coating 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 Axalta Coating Systems, you can compare the effects of market volatilities on Grocery Outlet and Axalta Coating 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 Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Axalta Coating.
Diversification Opportunities for Grocery Outlet and Axalta Coating
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grocery and Axalta is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems 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 Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Axalta Coating go up and down completely randomly.
Pair Corralation between Grocery Outlet and Axalta Coating
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 2.51 times more return on investment than Axalta Coating. However, Grocery Outlet is 2.51 times more volatile than Axalta Coating Systems. It trades about 0.21 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.32 per unit of risk. If you would invest 1,684 in Grocery Outlet Holding on August 28, 2024 and sell it today you would earn a total of 404.00 from holding Grocery Outlet Holding or generate 23.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Axalta Coating Systems
Performance |
| Timeline |
| Grocery Outlet Holding |
| Axalta Coating Systems |
Grocery Outlet and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Axalta Coating
The main advantage of trading using opposite Grocery Outlet and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Axalta Coating 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 Axalta Coating will offset losses from the drop in Axalta Coating's long position.| Grocery Outlet vs. Innovative Food Hldg | Grocery Outlet vs. Calavo Growers | Grocery Outlet vs. The Chefs Warehouse | Grocery Outlet vs. AMCON Distributing |
| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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