Correlation Between Grocery Outlet and LQwD FinTech
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and LQwD FinTech 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 LQwD FinTech 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 LQwD FinTech Corp, you can compare the effects of market volatilities on Grocery Outlet and LQwD FinTech 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 LQwD FinTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and LQwD FinTech.
Diversification Opportunities for Grocery Outlet and LQwD FinTech
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grocery and LQwD is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and LQwD FinTech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LQwD FinTech 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 LQwD FinTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LQwD FinTech Corp has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and LQwD FinTech go up and down completely randomly.
Pair Corralation between Grocery Outlet and LQwD FinTech
Allowing for the 90-day total investment horizon Grocery Outlet is expected to generate 111.28 times less return on investment than LQwD FinTech. But when comparing it to its historical volatility, Grocery Outlet Holding is 3.21 times less risky than LQwD FinTech. It trades about 0.01 of its potential returns per unit of risk. LQwD FinTech Corp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 110.00 in LQwD FinTech Corp on September 13, 2024 and sell it today you would earn a total of 93.00 from holding LQwD FinTech Corp or generate 84.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grocery Outlet Holding vs. LQwD FinTech Corp
Performance |
| Timeline |
| Grocery Outlet Holding |
| LQwD FinTech Corp |
Grocery Outlet and LQwD FinTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and LQwD FinTech
The main advantage of trading using opposite Grocery Outlet and LQwD FinTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, LQwD FinTech 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 LQwD FinTech will offset losses from the drop in LQwD FinTech'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 |
| LQwD FinTech vs. Salesforce | LQwD FinTech vs. SAP SE ADR | LQwD FinTech vs. ServiceNow | LQwD FinTech vs. Intuit Inc |
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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