Correlation Between Grocery Outlet and Vantage Drilling

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Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Vantage Drilling 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 Vantage Drilling 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 Vantage Drilling International, you can compare the effects of market volatilities on Grocery Outlet and Vantage Drilling 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 Vantage Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Vantage Drilling.

Diversification Opportunities for Grocery Outlet and Vantage Drilling

GroceryVantageDiversified AwayGroceryVantageDiversified Away100%
0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Grocery and Vantage is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Vantage Drilling International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Drilling Int 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 Vantage Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Drilling Int has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Vantage Drilling go up and down completely randomly.

Pair Corralation between Grocery Outlet and Vantage Drilling

If you would invest  2,550  in Vantage Drilling International on November 25, 2024 and sell it today you would earn a total of  0.00  from holding Vantage Drilling International or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Grocery Outlet Holding  vs.  Vantage Drilling International

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-5051015
JavaScript chart by amCharts 3.21.15GO VTDRF
       Timeline  
Grocery Outlet Holding 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Grocery Outlet Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15161718192021
Vantage Drilling Int 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Vantage Drilling International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vantage Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25.525.625.725.825.92626.126.2

Grocery Outlet and Vantage Drilling Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.93-3.7-2.46-1.22-0.01951.152.323.494.66 0.51.01.52.02.53.03.5
JavaScript chart by amCharts 3.21.15GO VTDRF
       Returns  

Pair Trading with Grocery Outlet and Vantage Drilling

The main advantage of trading using opposite Grocery Outlet and Vantage Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Vantage Drilling 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 Vantage Drilling will offset losses from the drop in Vantage Drilling's long position.
The idea behind Grocery Outlet Holding and Vantage Drilling International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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