Correlation Between Grocery Outlet and Oak Woods
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Oak Woods 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 Oak Woods 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 Oak Woods Acquisition, you can compare the effects of market volatilities on Grocery Outlet and Oak Woods 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 Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Oak Woods.
Diversification Opportunities for Grocery Outlet and Oak Woods
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grocery and Oak is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition 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 Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Oak Woods go up and down completely randomly.
Pair Corralation between Grocery Outlet and Oak Woods
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Oak Woods. In addition to that, Grocery Outlet is 13.23 times more volatile than Oak Woods Acquisition. It trades about -0.02 of its total potential returns per unit of risk. Oak Woods Acquisition is currently generating about 0.13 per unit of volatility. If you would invest 1,023 in Oak Woods Acquisition on August 31, 2024 and sell it today you would earn a total of 103.00 from holding Oak Woods Acquisition or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Oak Woods Acquisition
Performance |
| Timeline |
| Grocery Outlet Holding |
| Oak Woods Acquisition |
Grocery Outlet and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Oak Woods
The main advantage of trading using opposite Grocery Outlet and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' 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 |
| Oak Woods vs. Beyond Meat | Oak Woods vs. Bt Brands | Oak Woods vs. Warner Music Group | Oak Woods vs. Texas Roadhouse |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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