Correlation Between ANGLO ASIAN and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and SPARTAN STORES 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 ANGLO ASIAN and SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and SPARTAN STORES, you can compare the effects of market volatilities on ANGLO ASIAN and SPARTAN STORES 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 ANGLO ASIAN with a short position of SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and SPARTAN STORES.
Diversification Opportunities for ANGLO ASIAN and SPARTAN STORES
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ANGLO and SPARTAN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES and ANGLO ASIAN 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 ANGLO ASIAN MINING are associated (or correlated) with SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and SPARTAN STORES go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and SPARTAN STORES
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 1.59 times more return on investment than SPARTAN STORES. However, ANGLO ASIAN is 1.59 times more volatile than SPARTAN STORES. It trades about 0.13 of its potential returns per unit of risk. SPARTAN STORES is currently generating about -0.01 per unit of risk. If you would invest 122.00 in ANGLO ASIAN MINING on November 6, 2024 and sell it today you would earn a total of 8.00 from holding ANGLO ASIAN MINING or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. SPARTAN STORES
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| SPARTAN STORES |
ANGLO ASIAN and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and SPARTAN STORES
The main advantage of trading using opposite ANGLO ASIAN and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| ANGLO ASIAN vs. Air Transport Services | ANGLO ASIAN vs. BROADPEAK SA EO | ANGLO ASIAN vs. Sumitomo Rubber Industries | ANGLO ASIAN vs. Broadridge Financial Solutions |
| SPARTAN STORES vs. ALERION CLEANPOWER | SPARTAN STORES vs. Performance Food Group | SPARTAN STORES vs. Cairo Communication SpA | SPARTAN STORES vs. ULTRA CLEAN HLDGS |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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