Correlation Between AMAZON and Grocery Outlet
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By analyzing existing cross correlation between AMAZON INC 425 and Grocery Outlet Holding, you can compare the effects of market volatilities on AMAZON 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 AMAZON with a short position of Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMAZON and Grocery Outlet.
Diversification Opportunities for AMAZON and Grocery Outlet
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMAZON and Grocery is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AMAZON INC 425 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 AMAZON 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 AMAZON INC 425 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 AMAZON i.e., AMAZON and Grocery Outlet go up and down completely randomly.
Pair Corralation between AMAZON and Grocery Outlet
Assuming the 90 days trading horizon AMAZON is expected to generate 3.16 times less return on investment than Grocery Outlet. But when comparing it to its historical volatility, AMAZON INC 425 is 2.03 times less risky than Grocery Outlet. It trades about 0.28 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 1,505 in Grocery Outlet Holding on September 2, 2024 and sell it today you would earn a total of 595.00 from holding Grocery Outlet Holding or generate 39.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMAZON INC 425 vs. Grocery Outlet Holding
Performance |
| Timeline |
| AMAZON INC 425 |
| Grocery Outlet Holding |
AMAZON and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMAZON and Grocery Outlet
The main advantage of trading using opposite AMAZON and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMAZON 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.The idea behind AMAZON INC 425 and Grocery Outlet Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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