Correlation Between Grocery Outlet and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Fluence Energy 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 Fluence Energy 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 Fluence Energy, you can compare the effects of market volatilities on Grocery Outlet and Fluence Energy 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 Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Fluence Energy.
Diversification Opportunities for Grocery Outlet and Fluence Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grocery and Fluence is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy 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 Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Fluence Energy go up and down completely randomly.
Pair Corralation between Grocery Outlet and Fluence Energy
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Fluence Energy. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 2.03 times less risky than Fluence Energy. The stock trades about -0.02 of its potential returns per unit of risk. The Fluence Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,609 in Fluence Energy on August 26, 2024 and sell it today you would earn a total of 693.00 from holding Fluence Energy or generate 43.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Fluence Energy
Performance |
| Timeline |
| Grocery Outlet Holding |
| Fluence Energy |
Grocery Outlet and Fluence Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Fluence Energy
The main advantage of trading using opposite Grocery Outlet and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Fluence Energy 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 Fluence Energy will offset losses from the drop in Fluence Energy'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 |
| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies Holdings |
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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