Correlation Between SPROUTS FARMERS and CLEANTECH LITH
Can any of the company-specific risk be diversified away by investing in both SPROUTS FARMERS and CLEANTECH LITH 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 CLEANTECH LITH 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 CLEANTECH LITH LS, you can compare the effects of market volatilities on SPROUTS FARMERS and CLEANTECH LITH 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 CLEANTECH LITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPROUTS FARMERS and CLEANTECH LITH.
Diversification Opportunities for SPROUTS FARMERS and CLEANTECH LITH
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPROUTS and CLEANTECH is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPROUTS FARMERS MKT and CLEANTECH LITH LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEANTECH LITH LS 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 CLEANTECH LITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEANTECH LITH LS has no effect on the direction of SPROUTS FARMERS i.e., SPROUTS FARMERS and CLEANTECH LITH go up and down completely randomly.
Pair Corralation between SPROUTS FARMERS and CLEANTECH LITH
Assuming the 90 days trading horizon SPROUTS FARMERS MKT is expected to generate 0.35 times more return on investment than CLEANTECH LITH. However, SPROUTS FARMERS MKT is 2.84 times less risky than CLEANTECH LITH. It trades about 0.41 of its potential returns per unit of risk. CLEANTECH LITH LS is currently generating about -0.04 per unit of risk. If you would invest 12,865 in SPROUTS FARMERS MKT on November 2, 2024 and sell it today you would earn a total of 1,995 from holding SPROUTS FARMERS MKT or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
SPROUTS FARMERS MKT vs. CLEANTECH LITH LS
Performance |
| Timeline |
| SPROUTS FARMERS MKT |
| CLEANTECH LITH LS |
SPROUTS FARMERS and CLEANTECH LITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPROUTS FARMERS and CLEANTECH LITH
The main advantage of trading using opposite SPROUTS FARMERS and CLEANTECH LITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPROUTS FARMERS position performs unexpectedly, CLEANTECH LITH 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 CLEANTECH LITH will offset losses from the drop in CLEANTECH LITH's long position.| SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc | SPROUTS FARMERS vs. Apple Inc |
| CLEANTECH LITH vs. CENTURIA OFFICE REIT | CLEANTECH LITH vs. 24SEVENOFFICE GROUP AB | CLEANTECH LITH vs. Kingdee International Software | CLEANTECH LITH vs. alstria office REIT AG |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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