Correlation Between Grocery Outlet and NH Hotel
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and NH Hotel 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 NH Hotel 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 NH Hotel Group, you can compare the effects of market volatilities on Grocery Outlet and NH Hotel 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 NH Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and NH Hotel.
Diversification Opportunities for Grocery Outlet and NH Hotel
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grocery and NHHEF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and NH Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Hotel Group 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 NH Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Hotel Group has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and NH Hotel go up and down completely randomly.
Pair Corralation between Grocery Outlet and NH Hotel
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the NH Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 2.54 times less risky than NH Hotel. The stock trades about -0.25 of its potential returns per unit of risk. The NH Hotel Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 390.00 in NH Hotel Group on October 11, 2024 and sell it today you would earn a total of 150.00 from holding NH Hotel Group or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. NH Hotel Group
Performance |
| Timeline |
| Grocery Outlet Holding |
| NH Hotel Group |
Grocery Outlet and NH Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and NH Hotel
The main advantage of trading using opposite Grocery Outlet and NH Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, NH Hotel 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 NH Hotel will offset losses from the drop in NH Hotel'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 |
| NH Hotel vs. MYT Netherlands Parent | NH Hotel vs. LB Foster | NH Hotel vs. BBB Foods | NH Hotel vs. The Gap, |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |