Correlation Between Grocery Outlet and Custom Truck
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Custom Truck 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 Custom Truck 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 Custom Truck One, you can compare the effects of market volatilities on Grocery Outlet and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Custom Truck.
Diversification Opportunities for Grocery Outlet and Custom Truck
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grocery and Custom is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Custom Truck go up and down completely randomly.
Pair Corralation between Grocery Outlet and Custom Truck
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Custom Truck. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.15 times less risky than Custom Truck. The stock trades about -0.01 of its potential returns per unit of risk. The Custom Truck One is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 460.00 in Custom Truck One on August 26, 2024 and sell it today you would earn a total of 112.00 from holding Custom Truck One or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Custom Truck One
Performance |
| Timeline |
| Grocery Outlet Holding |
| Custom Truck One |
Grocery Outlet and Custom Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Custom Truck
The main advantage of trading using opposite Grocery Outlet and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.| Grocery Outlet vs. Hf Foods Group | Grocery Outlet vs. Innovative Food Hldg | Grocery Outlet vs. Calavo Growers | Grocery Outlet vs. The Chefs Warehouse |
| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. Mega Matrix Corp | Custom Truck vs. FTAI Aviation Ltd |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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