Correlation Between Grocery Outlet and Natures Miracle
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Natures Miracle 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 Natures Miracle 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 Natures Miracle Holding, you can compare the effects of market volatilities on Grocery Outlet and Natures Miracle 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 Natures Miracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Natures Miracle.
Diversification Opportunities for Grocery Outlet and Natures Miracle
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grocery and Natures is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Natures Miracle Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natures Miracle Holding 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 Natures Miracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natures Miracle Holding has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Natures Miracle go up and down completely randomly.
Pair Corralation between Grocery Outlet and Natures Miracle
Allowing for the 90-day total investment horizon Grocery Outlet is expected to generate 21.92 times less return on investment than Natures Miracle. But when comparing it to its historical volatility, Grocery Outlet Holding is 12.96 times less risky than Natures Miracle. It trades about 0.09 of its potential returns per unit of risk. Natures Miracle Holding is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.69 in Natures Miracle Holding on September 3, 2024 and sell it today you would lose (0.55) from holding Natures Miracle Holding or give up 32.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 48.44% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Natures Miracle Holding
Performance |
| Timeline |
| Grocery Outlet Holding |
| Natures Miracle Holding |
Grocery Outlet and Natures Miracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Natures Miracle
The main advantage of trading using opposite Grocery Outlet and Natures Miracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Natures Miracle 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 Natures Miracle will offset losses from the drop in Natures Miracle'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 |
| Natures Miracle vs. Coupang LLC | Natures Miracle vs. Revolve Group LLC | Natures Miracle vs. Tradeweb Markets | Natures Miracle vs. Grocery Outlet Holding |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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