Correlation Between Container Store and GrowGeneration Corp
Can any of the company-specific risk be diversified away by investing in both Container Store and GrowGeneration Corp 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 Container Store and GrowGeneration Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Container Store Group and GrowGeneration Corp, you can compare the effects of market volatilities on Container Store and GrowGeneration Corp 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 Container Store with a short position of GrowGeneration Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Container Store and GrowGeneration Corp.
Diversification Opportunities for Container Store and GrowGeneration Corp
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Container and GrowGeneration is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Container Store Group and GrowGeneration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrowGeneration Corp and Container Store 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 Container Store Group are associated (or correlated) with GrowGeneration Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrowGeneration Corp has no effect on the direction of Container Store i.e., Container Store and GrowGeneration Corp go up and down completely randomly.
Pair Corralation between Container Store and GrowGeneration Corp
Considering the 90-day investment horizon Container Store Group is expected to under-perform the GrowGeneration Corp. In addition to that, Container Store is 1.6 times more volatile than GrowGeneration Corp. It trades about -0.04 of its total potential returns per unit of risk. GrowGeneration Corp is currently generating about -0.02 per unit of volatility. If you would invest 634.00 in GrowGeneration Corp on August 28, 2024 and sell it today you would lose (441.00) from holding GrowGeneration Corp or give up 69.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Container Store Group vs. GrowGeneration Corp
Performance |
| Timeline |
| Container Store Group |
| GrowGeneration Corp |
Container Store and GrowGeneration Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Container Store and GrowGeneration Corp
The main advantage of trading using opposite Container Store and GrowGeneration Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Container Store position performs unexpectedly, GrowGeneration Corp 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 GrowGeneration Corp will offset losses from the drop in GrowGeneration Corp's long position.| Container Store vs. Tillys Inc | Container Store vs. Big 5 Sporting | Container Store vs. Sportsmans | Container Store vs. Noodles Company |
| GrowGeneration Corp vs. Evgo Inc | GrowGeneration Corp vs. Ulta Beauty | GrowGeneration Corp vs. Best Buy Co | GrowGeneration Corp vs. RH |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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