Correlation Between SPROUTS FARMERS and Apple
Can any of the company-specific risk be diversified away by investing in both SPROUTS FARMERS and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on SPROUTS FARMERS and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPROUTS FARMERS and Apple.
Diversification Opportunities for SPROUTS FARMERS and Apple
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPROUTS and Apple is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SPROUTS FARMERS MKT and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of SPROUTS FARMERS i.e., SPROUTS FARMERS and Apple go up and down completely randomly.
Pair Corralation between SPROUTS FARMERS and Apple
Assuming the 90 days trading horizon SPROUTS FARMERS MKT is expected to generate 1.4 times more return on investment than Apple. However, SPROUTS FARMERS is 1.4 times more volatile than Apple Inc. It trades about -0.01 of its potential returns per unit of risk. Apple Inc is currently generating about -0.02 per unit of risk. If you would invest 14,535 in SPROUTS FARMERS MKT on October 30, 2024 and sell it today you would lose (260.00) from holding SPROUTS FARMERS MKT or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPROUTS FARMERS MKT vs. Apple Inc
Performance |
| Timeline |
| SPROUTS FARMERS MKT |
| Apple Inc |
SPROUTS FARMERS and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPROUTS FARMERS and Apple
The main advantage of trading using opposite SPROUTS FARMERS and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPROUTS FARMERS position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| SPROUTS FARMERS vs. Align Technology | SPROUTS FARMERS vs. Easy Software AG | SPROUTS FARMERS vs. Charter Communications | SPROUTS FARMERS vs. ARROW ELECTRONICS |
| Apple vs. UNITED RENTALS | Apple vs. Ameriprise Financial | Apple vs. PNC Financial Services | Apple vs. BANK OF CHINA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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