Correlation Between Grocery Outlet and Anterix

Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Anterix 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 Grocery Outlet and Anterix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grocery Outlet Holding and Anterix, you can compare the effects of market volatilities on Grocery Outlet and Anterix 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 Grocery Outlet with a short position of Anterix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Anterix.

Diversification Opportunities for Grocery Outlet and Anterix

0.08

Correlation Coefficient

Grocery Outlet  Anterix

Significant diversification

The 3 months correlation between Grocery and Anterix is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix and Grocery Outlet 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 Grocery Outlet Holding are associated (or correlated) with Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Anterix go up and down completely randomly.

Pair Corralation between Grocery Outlet and Anterix

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 1.62 times more return on investment than Anterix. However, Grocery Outlet is 1.62 times more volatile than Anterix. It trades about -0.01 of its potential returns per unit of risk. Anterix is currently generating about -0.12 per unit of risk. If you would invest  1,708  in Grocery Outlet Holding on September 26, 2024 and sell it today you would lose (132.00) from holding Grocery Outlet Holding or give up 7.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grocery Outlet Holding  vs.  Anterix

Grocery Outlet Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grocery Outlet Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grocery Outlet is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Grocery Outlet and Anterix

The main advantage of trading using opposite Grocery Outlet and Anterix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Anterix 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 Anterix will offset losses from the drop in Anterix's long position.

The idea behind Grocery Outlet Holding and Anterix 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.