Correlation Between Sanyo Special and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Sanyo Special 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 Sanyo Special and Grocery Outlet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Special Steel and Grocery Outlet Holding, you can compare the effects of market volatilities on Sanyo Special 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 Sanyo Special with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Special and Grocery Outlet.
Diversification Opportunities for Sanyo Special and Grocery Outlet
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sanyo and Grocery is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Special Steel 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 Sanyo Special 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 Sanyo Special Steel 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 Sanyo Special i.e., Sanyo Special and Grocery Outlet go up and down completely randomly.
Pair Corralation between Sanyo Special and Grocery Outlet
Assuming the 90 days horizon Sanyo Special is expected to generate 8.61 times less return on investment than Grocery Outlet. But when comparing it to its historical volatility, Sanyo Special Steel is 50.47 times less risky than Grocery Outlet. It trades about 0.09 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,108 in Grocery Outlet Holding on September 2, 2024 and sell it today you would lose (8.00) from holding Grocery Outlet Holding or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Special Steel vs. Grocery Outlet Holding
Performance |
| Timeline |
| Sanyo Special Steel |
| Grocery Outlet Holding |
Sanyo Special and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Special and Grocery Outlet
The main advantage of trading using opposite Sanyo Special and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Special 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.| Sanyo Special vs. Software Acquisition Group | Sanyo Special vs. National CineMedia | Sanyo Special vs. Fluent Inc | Sanyo Special vs. Deluxe |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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