Correlation Between SPROUTS FARMERS and WICKES GROUP
Can any of the company-specific risk be diversified away by investing in both SPROUTS FARMERS and WICKES GROUP 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 SPROUTS FARMERS and WICKES GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPROUTS FARMERS MKT and WICKES GROUP PLC, you can compare the effects of market volatilities on SPROUTS FARMERS and WICKES GROUP 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 SPROUTS FARMERS with a short position of WICKES GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPROUTS FARMERS and WICKES GROUP.
Diversification Opportunities for SPROUTS FARMERS and WICKES GROUP
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPROUTS and WICKES is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding SPROUTS FARMERS MKT and WICKES GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICKES GROUP PLC and SPROUTS FARMERS 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 SPROUTS FARMERS MKT are associated (or correlated) with WICKES GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICKES GROUP PLC has no effect on the direction of SPROUTS FARMERS i.e., SPROUTS FARMERS and WICKES GROUP go up and down completely randomly.
Pair Corralation between SPROUTS FARMERS and WICKES GROUP
Assuming the 90 days trading horizon SPROUTS FARMERS MKT is expected to generate 1.34 times more return on investment than WICKES GROUP. However, SPROUTS FARMERS is 1.34 times more volatile than WICKES GROUP PLC. It trades about 0.01 of its potential returns per unit of risk. WICKES GROUP PLC is currently generating about 0.01 per unit of risk. If you would invest 13,590 in SPROUTS FARMERS MKT on October 19, 2024 and sell it today you would earn a total of 20.00 from holding SPROUTS FARMERS MKT or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPROUTS FARMERS MKT vs. WICKES GROUP PLC
Performance |
| Timeline |
| SPROUTS FARMERS MKT |
| WICKES GROUP PLC |
SPROUTS FARMERS and WICKES GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPROUTS FARMERS and WICKES GROUP
The main advantage of trading using opposite SPROUTS FARMERS and WICKES GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPROUTS FARMERS position performs unexpectedly, WICKES GROUP 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 WICKES GROUP will offset losses from the drop in WICKES GROUP's long position.| SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc |
| WICKES GROUP vs. SERI INDUSTRIAL EO | WICKES GROUP vs. COFCO Joycome Foods | WICKES GROUP vs. MAGNUM MINING EXP | WICKES GROUP vs. MCEWEN MINING INC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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