Correlation Between Grocery Outlet and CHS
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and CHS 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 CHS 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 CHS Inc CN, you can compare the effects of market volatilities on Grocery Outlet and CHS 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 CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and CHS.
Diversification Opportunities for Grocery Outlet and CHS
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grocery and CHS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and CHS Inc CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CN 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 CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CN has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and CHS go up and down completely randomly.
Pair Corralation between Grocery Outlet and CHS
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the CHS. In addition to that, Grocery Outlet is 4.09 times more volatile than CHS Inc CN. It trades about -0.02 of its total potential returns per unit of risk. CHS Inc CN is currently generating about 0.05 per unit of volatility. If you would invest 2,184 in CHS Inc CN on August 31, 2024 and sell it today you would earn a total of 357.00 from holding CHS Inc CN or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. CHS Inc CN
Performance |
| Timeline |
| Grocery Outlet Holding |
| CHS Inc CN |
Grocery Outlet and CHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and CHS
The main advantage of trading using opposite Grocery Outlet and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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