Correlation Between Ocado Group and Carrefour
Can any of the company-specific risk be diversified away by investing in both Ocado Group and Carrefour 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 Carrefour 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 Carrefour SA PK, you can compare the effects of market volatilities on Ocado Group and Carrefour 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 Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and Carrefour.
Diversification Opportunities for Ocado Group and Carrefour
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ocado and Carrefour is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group PLC and Carrefour SA PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA PK 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 Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA PK has no effect on the direction of Ocado Group i.e., Ocado Group and Carrefour go up and down completely randomly.
Pair Corralation between Ocado Group and Carrefour
Assuming the 90 days horizon Ocado Group PLC is expected to generate 3.09 times more return on investment than Carrefour. However, Ocado Group is 3.09 times more volatile than Carrefour SA PK. It trades about 0.02 of its potential returns per unit of risk. Carrefour SA PK is currently generating about -0.01 per unit of risk. If you would invest 448.00 in Ocado Group PLC on August 31, 2024 and sell it today you would lose (47.00) from holding Ocado Group PLC or give up 10.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ocado Group PLC vs. Carrefour SA PK
Performance |
| Timeline |
| Ocado Group PLC |
| Carrefour SA PK |
Ocado Group and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and Carrefour
The main advantage of trading using opposite Ocado Group and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado Group position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.| Ocado Group vs. Tesco PLC | Ocado Group vs. Woolworths Group Limited | Ocado Group vs. Kesko Oyj ADR | Ocado Group vs. Carrefour SA PK |
| Carrefour vs. Kesko Oyj ADR | Carrefour vs. Carrefour SA | Carrefour vs. J Sainsbury plc | Carrefour vs. Om Holdings International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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