Correlation Between Natural Grocers and Metro
Can any of the company-specific risk be diversified away by investing in both Natural Grocers and Metro 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 Metro 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 Metro Inc, you can compare the effects of market volatilities on Natural Grocers and Metro 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 Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Metro.
Diversification Opportunities for Natural Grocers and Metro
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Natural and Metro is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and Metro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Inc 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 Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Inc has no effect on the direction of Natural Grocers i.e., Natural Grocers and Metro go up and down completely randomly.
Pair Corralation between Natural Grocers and Metro
Given the investment horizon of 90 days Natural Grocers by is expected to generate 2.43 times more return on investment than Metro. However, Natural Grocers is 2.43 times more volatile than Metro Inc. It trades about 0.12 of its potential returns per unit of risk. Metro Inc is currently generating about 0.18 per unit of risk. If you would invest 4,169 in Natural Grocers by on November 28, 2024 and sell it today you would earn a total of 364.00 from holding Natural Grocers by or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Natural Grocers by vs. Metro Inc
Performance |
| Timeline |
| Natural Grocers by |
| Metro Inc |
Natural Grocers and Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Grocers and Metro
The main advantage of trading using opposite Natural Grocers and Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Grocers position performs unexpectedly, Metro 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 Metro will offset losses from the drop in Metro's long position.| Natural Grocers vs. Weis Markets | Natural Grocers vs. Ingles Markets Incorporated | Natural Grocers vs. Grocery Outlet Holding | Natural Grocers vs. Village Super Market |
| Metro vs. Natural Grocers by | Metro vs. Sprouts Farmers Market | Metro vs. Albertsons Companies | Metro vs. Kroger Company |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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