Correlation Between Ocado Group and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Ocado Group 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 Ocado Group and Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocado Group plc and Grocery Outlet Holding, you can compare the effects of market volatilities on Ocado Group 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 Ocado Group with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and Grocery Outlet.
Diversification Opportunities for Ocado Group and Grocery Outlet
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ocado and Grocery is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group plc 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 Ocado Group 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 Ocado Group plc 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 Ocado Group i.e., Ocado Group and Grocery Outlet go up and down completely randomly.
Pair Corralation between Ocado Group and Grocery Outlet
Assuming the 90 days horizon Ocado Group plc is expected to under-perform the Grocery Outlet. In addition to that, Ocado Group is 1.22 times more volatile than Grocery Outlet Holding. It trades about -0.04 of its total potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.03 per unit of volatility. If you would invest 2,200 in Grocery Outlet Holding on August 24, 2024 and sell it today you would lose (335.00) from holding Grocery Outlet Holding or give up 15.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocado Group plc vs. Grocery Outlet Holding
Performance |
| Timeline |
| Ocado Group plc |
| Grocery Outlet Holding |
Ocado Group and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and Grocery Outlet
The main advantage of trading using opposite Ocado Group and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado Group 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.| Ocado Group vs. Kroger Company | Ocado Group vs. Seven i Holdings | Ocado Group vs. Woolworths Group Limited | Ocado Group vs. Koninklijke Ahold Delhaize |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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