Correlation Between Grocery Outlet and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Kesko Oyj 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 Kesko Oyj 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 Kesko Oyj ADR, you can compare the effects of market volatilities on Grocery Outlet and Kesko Oyj 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 Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Kesko Oyj.
Diversification Opportunities for Grocery Outlet and Kesko Oyj
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grocery and Kesko is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR 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 Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Kesko Oyj go up and down completely randomly.
Pair Corralation between Grocery Outlet and Kesko Oyj
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 2.15 times more return on investment than Kesko Oyj. However, Grocery Outlet is 2.15 times more volatile than Kesko Oyj ADR. It trades about 0.15 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.05 per unit of risk. If you would invest 1,672 in Grocery Outlet Holding on August 24, 2024 and sell it today you would earn a total of 262.50 from holding Grocery Outlet Holding or generate 15.7% 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. Kesko Oyj ADR
Performance |
| Timeline |
| Grocery Outlet Holding |
| Kesko Oyj ADR |
Grocery Outlet and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Kesko Oyj
The main advantage of trading using opposite Grocery Outlet and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj'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 |
| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj vs. Ingles Markets Incorporated |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |