Correlation Between Grocery Outlet and Magnite
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Magnite 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 Magnite 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 Magnite, you can compare the effects of market volatilities on Grocery Outlet and Magnite 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 Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Magnite.
Diversification Opportunities for Grocery Outlet and Magnite
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grocery and Magnite is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite 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 Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Magnite go up and down completely randomly.
Pair Corralation between Grocery Outlet and Magnite
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Magnite. In addition to that, Grocery Outlet is 1.37 times more volatile than Magnite. It trades about -0.05 of its total potential returns per unit of risk. Magnite is currently generating about 0.12 per unit of volatility. If you would invest 1,564 in Magnite on September 19, 2024 and sell it today you would earn a total of 93.00 from holding Magnite or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Magnite
Performance |
| Timeline |
| Grocery Outlet Holding |
| Magnite |
Grocery Outlet and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Magnite
The main advantage of trading using opposite Grocery Outlet and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite'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 |
| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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