Correlation Between Ocado Group and Ingles Markets
Can any of the company-specific risk be diversified away by investing in both Ocado Group and Ingles Markets 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 Ingles Markets 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 Ingles Markets Incorporated, you can compare the effects of market volatilities on Ocado Group and Ingles Markets 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 Ingles Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and Ingles Markets.
Diversification Opportunities for Ocado Group and Ingles Markets
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ocado and Ingles is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group plc and Ingles Markets Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingles Markets 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 Ingles Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingles Markets has no effect on the direction of Ocado Group i.e., Ocado Group and Ingles Markets go up and down completely randomly.
Pair Corralation between Ocado Group and Ingles Markets
Assuming the 90 days horizon Ocado Group plc is expected to under-perform the Ingles Markets. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ocado Group plc is 1.22 times less risky than Ingles Markets. The pink sheet trades about -0.51 of its potential returns per unit of risk. The Ingles Markets Incorporated is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 6,189 in Ingles Markets Incorporated on August 28, 2024 and sell it today you would earn a total of 1,341 from holding Ingles Markets Incorporated or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocado Group plc vs. Ingles Markets Incorporated
Performance |
| Timeline |
| Ocado Group plc |
| Ingles Markets |
Ocado Group and Ingles Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and Ingles Markets
The main advantage of trading using opposite Ocado Group and Ingles Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado Group position performs unexpectedly, Ingles Markets 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 Ingles Markets will offset losses from the drop in Ingles Markets' long position.| Ocado Group vs. Natural Grocers by | Ocado Group vs. Grocery Outlet Holding | Ocado Group vs. Village Super Market | Ocado Group vs. Ingles Markets Incorporated |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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