Correlation Between Grocery Outlet and Joint Corp
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Joint Corp 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 Joint Corp 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 The Joint Corp, you can compare the effects of market volatilities on Grocery Outlet and Joint Corp 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 Joint Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Joint Corp.
Diversification Opportunities for Grocery Outlet and Joint Corp
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grocery and Joint is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp 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 Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Joint Corp go up and down completely randomly.
Pair Corralation between Grocery Outlet and Joint Corp
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Joint Corp. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.5 times less risky than Joint Corp. The stock trades about -0.02 of its potential returns per unit of risk. The The Joint Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,506 in The Joint Corp on August 26, 2024 and sell it today you would lose (331.00) from holding The Joint Corp or give up 21.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. The Joint Corp
Performance |
| Timeline |
| Grocery Outlet Holding |
| Joint Corp |
Grocery Outlet and Joint Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Joint Corp
The main advantage of trading using opposite Grocery Outlet and Joint Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Joint Corp 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 Joint Corp will offset losses from the drop in Joint Corp'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 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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