Correlation Between Grocery Outlet and Steakholder Foods
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Steakholder Foods 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 Steakholder Foods 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 Steakholder Foods, you can compare the effects of market volatilities on Grocery Outlet and Steakholder Foods 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 Steakholder Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Steakholder Foods.
Diversification Opportunities for Grocery Outlet and Steakholder Foods
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grocery and Steakholder is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Steakholder Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steakholder Foods 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 Steakholder Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steakholder Foods has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Steakholder Foods go up and down completely randomly.
Pair Corralation between Grocery Outlet and Steakholder Foods
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 0.9 times more return on investment than Steakholder Foods. However, Grocery Outlet Holding is 1.11 times less risky than Steakholder Foods. It trades about 0.09 of its potential returns per unit of risk. Steakholder Foods is currently generating about -0.06 per unit of risk. If you would invest 1,792 in Grocery Outlet Holding on September 3, 2024 and sell it today you would earn a total of 308.00 from holding Grocery Outlet Holding or generate 17.19% 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. Steakholder Foods
Performance |
| Timeline |
| Grocery Outlet Holding |
| Steakholder Foods |
Grocery Outlet and Steakholder Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Steakholder Foods
The main advantage of trading using opposite Grocery Outlet and Steakholder Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Steakholder Foods 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 Steakholder Foods will offset losses from the drop in Steakholder Foods' 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 |
| Steakholder Foods vs. Seneca Foods Corp | Steakholder Foods vs. J J Snack | Steakholder Foods vs. Central Garden Pet | Steakholder Foods vs. Central Garden Pet |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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