Correlation Between MYT Netherlands and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both MYT Netherlands 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 MYT Netherlands and Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYT Netherlands Parent and Grocery Outlet Holding, you can compare the effects of market volatilities on MYT Netherlands 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 MYT Netherlands with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Grocery Outlet.
Diversification Opportunities for MYT Netherlands and Grocery Outlet
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MYT and Grocery is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent 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 MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and Grocery Outlet go up and down completely randomly.
Pair Corralation between MYT Netherlands and Grocery Outlet
Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.52 times more return on investment than Grocery Outlet. However, MYT Netherlands is 1.52 times more volatile than Grocery Outlet Holding. It trades about 0.37 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.06 per unit of risk. If you would invest 705.00 in MYT Netherlands Parent on October 20, 2024 and sell it today you would earn a total of 234.00 from holding MYT Netherlands Parent or generate 33.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYT Netherlands Parent vs. Grocery Outlet Holding
Performance |
| Timeline |
| MYT Netherlands Parent |
| Grocery Outlet Holding |
MYT Netherlands and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYT Netherlands and Grocery Outlet
The main advantage of trading using opposite MYT Netherlands and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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.| MYT Netherlands vs. VF Corporation | MYT Netherlands vs. Levi Strauss Co | MYT Netherlands vs. Under Armour A | MYT Netherlands vs. Columbia Sportswear |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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