Correlation Between Natural Grocers and Chefs Warehouse
Can any of the company-specific risk be diversified away by investing in both Natural Grocers and Chefs Warehouse 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 Natural Grocers and Chefs Warehouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Grocers by and The Chefs Warehouse, you can compare the effects of market volatilities on Natural Grocers and Chefs Warehouse 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 Natural Grocers with a short position of Chefs Warehouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Chefs Warehouse.
Diversification Opportunities for Natural Grocers and Chefs Warehouse
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Natural and Chefs is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and The Chefs Warehouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chefs Warehouse and Natural Grocers 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 Natural Grocers by are associated (or correlated) with Chefs Warehouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chefs Warehouse has no effect on the direction of Natural Grocers i.e., Natural Grocers and Chefs Warehouse go up and down completely randomly.
Pair Corralation between Natural Grocers and Chefs Warehouse
Given the investment horizon of 90 days Natural Grocers by is expected to generate 2.24 times more return on investment than Chefs Warehouse. However, Natural Grocers is 2.24 times more volatile than The Chefs Warehouse. It trades about 0.24 of its potential returns per unit of risk. The Chefs Warehouse is currently generating about 0.06 per unit of risk. If you would invest 2,571 in Natural Grocers by on August 28, 2024 and sell it today you would earn a total of 2,127 from holding Natural Grocers by or generate 82.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Grocers by vs. The Chefs Warehouse
Performance |
| Timeline |
| Natural Grocers by |
| Chefs Warehouse |
Natural Grocers and Chefs Warehouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Grocers and Chefs Warehouse
The main advantage of trading using opposite Natural Grocers and Chefs Warehouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Grocers position performs unexpectedly, Chefs Warehouse 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 Chefs Warehouse will offset losses from the drop in Chefs Warehouse's long position.| Natural Grocers vs. Innovative Food Hldg | Natural Grocers vs. Calavo Growers | Natural Grocers vs. The Chefs Warehouse | Natural Grocers vs. AMCON Distributing |
| Chefs Warehouse vs. US Foods Holding | Chefs Warehouse vs. Sysco | Chefs Warehouse vs. SpartanNash Co | Chefs Warehouse vs. Calavo Growers |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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