Correlation Between Maiden Holdings and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and Grocery Outlet 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 Maiden Holdings and Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Grocery Outlet Holding, you can compare the effects of market volatilities on Maiden Holdings and Grocery Outlet 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 Maiden Holdings with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Grocery Outlet.
Diversification Opportunities for Maiden Holdings and Grocery Outlet
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maiden and Grocery is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding and Maiden Holdings 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 Maiden Holdings are associated (or correlated) with Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Grocery Outlet go up and down completely randomly.
Pair Corralation between Maiden Holdings and Grocery Outlet
Given the investment horizon of 90 days Maiden Holdings is expected to generate 36.3 times less return on investment than Grocery Outlet. But when comparing it to its historical volatility, Maiden Holdings is 4.08 times less risky than Grocery Outlet. It trades about 0.03 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,661 in Grocery Outlet Holding on August 30, 2024 and sell it today you would earn a total of 464.00 from holding Grocery Outlet Holding or generate 27.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Grocery Outlet Holding
Performance |
| Timeline |
| Maiden Holdings |
| Grocery Outlet Holding |
Maiden Holdings and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Grocery Outlet
The main advantage of trading using opposite Maiden Holdings and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's long position.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| Grocery Outlet vs. Weis Markets | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Sendas Distribuidora SA | Grocery Outlet vs. Village Super Market |
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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