Correlation Between Natural Grocers and Ocado Group
Can any of the company-specific risk be diversified away by investing in both Natural Grocers and Ocado Group 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 Ocado Group 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 Ocado Group plc, you can compare the effects of market volatilities on Natural Grocers and Ocado Group 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 Ocado Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Ocado Group.
Diversification Opportunities for Natural Grocers and Ocado Group
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natural and Ocado is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and Ocado Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocado Group plc 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 Ocado Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocado Group plc has no effect on the direction of Natural Grocers i.e., Natural Grocers and Ocado Group go up and down completely randomly.
Pair Corralation between Natural Grocers and Ocado Group
Given the investment horizon of 90 days Natural Grocers by is expected to generate 0.69 times more return on investment than Ocado Group. However, Natural Grocers by is 1.46 times less risky than Ocado Group. It trades about 0.15 of its potential returns per unit of risk. Ocado Group plc is currently generating about 0.01 per unit of risk. If you would invest 980.00 in Natural Grocers by on August 27, 2024 and sell it today you would earn a total of 3,580 from holding Natural Grocers by or generate 365.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Grocers by vs. Ocado Group plc
Performance |
| Timeline |
| Natural Grocers by |
| Ocado Group plc |
Natural Grocers and Ocado Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Grocers and Ocado Group
The main advantage of trading using opposite Natural Grocers and Ocado Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Grocers position performs unexpectedly, Ocado Group 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 Ocado Group will offset losses from the drop in Ocado Group'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 |
| Ocado Group vs. Natural Grocers by | Ocado Group vs. Grocery Outlet Holding | Ocado Group vs. Village Super Market | Ocado Group vs. Ingles Markets Incorporated |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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