Correlation Between Grocery Outlet and Service Properties
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet and Service Properties 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 Service Properties 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 Service Properties Trust, you can compare the effects of market volatilities on Grocery Outlet and Service Properties 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 Service Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Service Properties.
Diversification Opportunities for Grocery Outlet and Service Properties
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grocery and Service is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust 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 Service Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Service Properties go up and down completely randomly.
Pair Corralation between Grocery Outlet and Service Properties
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 0.93 times more return on investment than Service Properties. However, Grocery Outlet Holding is 1.07 times less risky than Service Properties. It trades about 0.1 of its potential returns per unit of risk. Service Properties Trust is currently generating about -0.18 per unit of risk. If you would invest 1,627 in Grocery Outlet Holding on September 12, 2024 and sell it today you would earn a total of 332.00 from holding Grocery Outlet Holding or generate 20.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grocery Outlet Holding vs. Service Properties Trust
Performance |
Timeline |
Grocery Outlet Holding |
Service Properties Trust |
Grocery Outlet and Service Properties Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grocery Outlet and Service Properties
The main advantage of trading using opposite Grocery Outlet and Service Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet position performs unexpectedly, Service Properties 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 Service Properties will offset losses from the drop in Service Properties' long position.Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
Service Properties vs. BCE Inc | Service Properties vs. CF Industries Holdings | Service Properties vs. Grupo Televisa SAB | Service Properties vs. Sealed Air |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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