Correlation Between Organic Meat and Grays Leasing

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

By analyzing existing cross correlation between The Organic Meat and Grays Leasing, you can compare the effects of market volatilities on Organic Meat and Grays Leasing 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 Organic Meat with a short position of Grays Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organic Meat and Grays Leasing.

Diversification Opportunities for Organic Meat and Grays Leasing

0.76

Correlation Coefficient

Organic Meat  Grays Leasing

Poor diversification

The 3 months correlation between Organic and Grays is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Organic Meat and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing and Organic Meat 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 The Organic Meat are associated (or correlated) with Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of Organic Meat i.e., Organic Meat and Grays Leasing go up and down completely randomly.

Pair Corralation between Organic Meat and Grays Leasing

Assuming the 90 days trading horizon The Organic Meat is expected to under-perform the Grays Leasing. But the stock apears to be less risky and, when comparing its historical volatility, The Organic Meat is 1.51 times less risky than Grays Leasing. The stock trades about -0.12 of its potential returns per unit of risk. The Grays Leasing is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  525.00  in Grays Leasing on September 5, 2024 and sell it today you would lose (25.00) from holding Grays Leasing or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	87.5%
Values	Daily Returns

The Organic Meat  vs.  Grays Leasing

Organic Meat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Organic Meat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Grays Leasing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grays Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Grays Leasing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Organic Meat and Grays Leasing

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

The idea behind The Organic Meat and Grays Leasing 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.