Correlation Between Grocery Outlet and NextTrip
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and NextTrip 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 NextTrip 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 NextTrip, you can compare the effects of market volatilities on Grocery Outlet and NextTrip 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 NextTrip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and NextTrip.
Diversification Opportunities for Grocery Outlet and NextTrip
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grocery and NextTrip is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and NextTrip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextTrip 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 NextTrip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextTrip has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and NextTrip go up and down completely randomly.
Pair Corralation between Grocery Outlet and NextTrip
Allowing for the 90-day total investment horizon Grocery Outlet is expected to generate 2.7 times less return on investment than NextTrip. But when comparing it to its historical volatility, Grocery Outlet Holding is 4.15 times less risky than NextTrip. It trades about 0.4 of its potential returns per unit of risk. NextTrip is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 185.00 in NextTrip on September 5, 2024 and sell it today you would earn a total of 169.00 from holding NextTrip or generate 91.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grocery Outlet Holding vs. NextTrip
Performance |
| Timeline |
| Grocery Outlet Holding |
| NextTrip |
Grocery Outlet and NextTrip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and NextTrip
The main advantage of trading using opposite Grocery Outlet and NextTrip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, NextTrip 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 NextTrip will offset losses from the drop in NextTrip'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 |
| NextTrip vs. Wabash National | NextTrip vs. Li Auto | NextTrip vs. Lucid Group | NextTrip vs. Marine Products |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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