Correlation Between Grom Social and Locafy
Can any of the company-specific risk be diversified away by investing in both Grom Social and Locafy 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 Grom Social and Locafy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grom Social Enterprises and Locafy, you can compare the effects of market volatilities on Grom Social and Locafy 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 Grom Social with a short position of Locafy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grom Social and Locafy.
Diversification Opportunities for Grom Social and Locafy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grom and Locafy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Grom Social Enterprises and Locafy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locafy and Grom Social 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 Grom Social Enterprises are associated (or correlated) with Locafy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locafy has no effect on the direction of Grom Social i.e., Grom Social and Locafy go up and down completely randomly.
Pair Corralation between Grom Social and Locafy
Given the investment horizon of 90 days Grom Social Enterprises is expected to generate 4.56 times more return on investment than Locafy. However, Grom Social is 4.56 times more volatile than Locafy. It trades about -0.02 of its potential returns per unit of risk. Locafy is currently generating about -0.26 per unit of risk. If you would invest 0.04 in Grom Social Enterprises on October 7, 2025 and sell it today you would lose (0.03) from holding Grom Social Enterprises or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.92% |
| Values | Daily Returns |
Grom Social Enterprises vs. Locafy
Performance |
| Timeline |
| Grom Social Enterprises |
| Locafy |
Grom Social and Locafy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grom Social and Locafy
The main advantage of trading using opposite Grom Social and Locafy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grom Social position performs unexpectedly, Locafy 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 Locafy will offset losses from the drop in Locafy's long position.| Grom Social vs. RiskOn International | Grom Social vs. Media Way Corp | Grom Social vs. Consolidated Gold Holdings | Grom Social vs. Superhero Scramble |
| Locafy vs. Onfolio Holdings | Locafy vs. TEN Holdings Common | Locafy vs. Cheetah Mobile | Locafy vs. Lendway |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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