Correlation Between SPROUTS FARMERS and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both SPROUTS FARMERS and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on SPROUTS FARMERS and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPROUTS FARMERS and VIVA WINE.
Diversification Opportunities for SPROUTS FARMERS and VIVA WINE
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPROUTS and VIVA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SPROUTS FARMERS MKT and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of SPROUTS FARMERS i.e., SPROUTS FARMERS and VIVA WINE go up and down completely randomly.
Pair Corralation between SPROUTS FARMERS and VIVA WINE
Assuming the 90 days trading horizon SPROUTS FARMERS MKT is expected to generate 0.37 times more return on investment than VIVA WINE. However, SPROUTS FARMERS MKT is 2.72 times less risky than VIVA WINE. It trades about 0.17 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about 0.06 per unit of risk. If you would invest 2,940 in SPROUTS FARMERS MKT on October 19, 2024 and sell it today you would earn a total of 10,640 from holding SPROUTS FARMERS MKT or generate 361.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPROUTS FARMERS MKT vs. VIVA WINE GROUP
Performance |
| Timeline |
| SPROUTS FARMERS MKT |
| VIVA WINE GROUP |
SPROUTS FARMERS and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPROUTS FARMERS and VIVA WINE
The main advantage of trading using opposite SPROUTS FARMERS and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPROUTS FARMERS position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc |
| VIVA WINE vs. PENN Entertainment | VIVA WINE vs. WILLIS LEASE FIN | VIVA WINE vs. Townsquare Media | VIVA WINE vs. Nexstar Media Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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