Correlation Between Grocery Outlet and SBC Medical
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and SBC Medical 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 SBC Medical 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 SBC Medical Group, you can compare the effects of market volatilities on Grocery Outlet and SBC Medical 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 SBC Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and SBC Medical.
Diversification Opportunities for Grocery Outlet and SBC Medical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grocery and SBC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and SBC Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Medical 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 SBC Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Medical Group has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and SBC Medical go up and down completely randomly.
Pair Corralation between Grocery Outlet and SBC Medical
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the SBC Medical. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 4.77 times less risky than SBC Medical. The stock trades about -0.05 of its potential returns per unit of risk. The SBC Medical Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7.31 in SBC Medical Group on October 25, 2024 and sell it today you would earn a total of 18.69 from holding SBC Medical Group or generate 255.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 17.44% |
| Values | Daily Returns |
Grocery Outlet Holding vs. SBC Medical Group
Performance |
| Timeline |
| Grocery Outlet Holding |
| SBC Medical Group |
Grocery Outlet and SBC Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and SBC Medical
The main advantage of trading using opposite Grocery Outlet and SBC Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, SBC Medical 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 SBC Medical will offset losses from the drop in SBC Medical'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 |
| SBC Medical vs. 1 800 FLOWERSCOM | SBC Medical vs. Space Communication | SBC Medical vs. Asbury Automotive Group | SBC Medical vs. Reservoir Media |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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