Correlation Between SBC Medical and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both SBC Medical 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 SBC Medical and Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBC Medical Group and Grocery Outlet Holding, you can compare the effects of market volatilities on SBC Medical 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 SBC Medical with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Medical and Grocery Outlet.
Diversification Opportunities for SBC Medical and Grocery Outlet
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBC and Grocery is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group 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 SBC Medical 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 SBC Medical Group 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 SBC Medical i.e., SBC Medical and Grocery Outlet go up and down completely randomly.
Pair Corralation between SBC Medical and Grocery Outlet
Assuming the 90 days horizon SBC Medical Group is expected to generate 5.03 times more return on investment than Grocery Outlet. However, SBC Medical is 5.03 times more volatile than Grocery Outlet Holding. It trades about 0.18 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.03 per unit of risk. If you would invest 7.31 in SBC Medical Group on October 10, 2024 and sell it today you would earn a total of 15.69 from holding SBC Medical Group or generate 214.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 15.56% |
| Values | Daily Returns |
SBC Medical Group vs. Grocery Outlet Holding
Performance |
| Timeline |
| SBC Medical Group |
| Grocery Outlet Holding |
SBC Medical and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Medical and Grocery Outlet
The main advantage of trading using opposite SBC Medical and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical 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.| SBC Medical vs. Nascent Wine | SBC Medical vs. Grocery Outlet Holding | SBC Medical vs. China Tontine Wines | SBC Medical vs. Primo Brands |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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