Correlation Between Grocery Outlet and Seven I
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Seven I 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 Seven I 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 Seven i Holdings, you can compare the effects of market volatilities on Grocery Outlet and Seven I 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 Seven I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Seven I.
Diversification Opportunities for Grocery Outlet and Seven I
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grocery and Seven is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Seven i Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven i Holdings 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 Seven I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven i Holdings has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Seven I go up and down completely randomly.
Pair Corralation between Grocery Outlet and Seven I
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Seven I. But the stock apears to be less risky and, when comparing its historical volatility, Grocery Outlet Holding is 1.54 times less risky than Seven I. The stock trades about -0.02 of its potential returns per unit of risk. The Seven i Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,316 in Seven i Holdings on August 31, 2024 and sell it today you would earn a total of 376.00 from holding Seven i Holdings or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Seven i Holdings
Performance |
| Timeline |
| Grocery Outlet Holding |
| Seven i Holdings |
Grocery Outlet and Seven I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Seven I
The main advantage of trading using opposite Grocery Outlet and Seven I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Seven I 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 Seven I will offset losses from the drop in Seven I'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 |
| Seven I vs. Koninklijke Ahold Delhaize | Seven I vs. Weis Markets | Seven I vs. Albertsons Companies | Seven I vs. Dingdong ADR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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