Correlation Between Grocery Outlet and Lakeland Industries
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Lakeland Industries 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 Lakeland Industries 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 Lakeland Industries, you can compare the effects of market volatilities on Grocery Outlet and Lakeland Industries 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 Lakeland Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Lakeland Industries.
Diversification Opportunities for Grocery Outlet and Lakeland Industries
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grocery and Lakeland is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Lakeland Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Industries 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 Lakeland Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Industries has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Lakeland Industries go up and down completely randomly.
Pair Corralation between Grocery Outlet and Lakeland Industries
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 1.64 times more return on investment than Lakeland Industries. However, Grocery Outlet is 1.64 times more volatile than Lakeland Industries. It trades about 0.5 of its potential returns per unit of risk. Lakeland Industries is currently generating about 0.41 per unit of risk. If you would invest 1,430 in Grocery Outlet Holding on September 1, 2024 and sell it today you would earn a total of 670.00 from holding Grocery Outlet Holding or generate 46.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Lakeland Industries
Performance |
| Timeline |
| Grocery Outlet Holding |
| Lakeland Industries |
Grocery Outlet and Lakeland Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Lakeland Industries
The main advantage of trading using opposite Grocery Outlet and Lakeland Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Lakeland Industries 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 Lakeland Industries will offset losses from the drop in Lakeland Industries' 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 |
| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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