Correlation Between Apple and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SPARTAN STORES, you can compare the effects of market volatilities on Apple 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 Apple with a short position of SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SPARTAN STORES.
Diversification Opportunities for Apple and SPARTAN STORES
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and SPARTAN is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES and Apple 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 Apple Inc 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 Apple i.e., Apple and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Apple and SPARTAN STORES
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.6 times more return on investment than SPARTAN STORES. However, Apple Inc is 1.66 times less risky than SPARTAN STORES. It trades about 0.49 of its potential returns per unit of risk. SPARTAN STORES is currently generating about 0.21 per unit of risk. If you would invest 21,425 in Apple Inc on September 14, 2024 and sell it today you would earn a total of 2,255 from holding Apple Inc or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SPARTAN STORES
Performance |
| Timeline |
| Apple Inc |
| SPARTAN STORES |
Apple and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SPARTAN STORES
The main advantage of trading using opposite Apple and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. LION ONE METALS | Apple vs. MCEWEN MINING INC | Apple vs. Universal Entertainment | Apple vs. TOWNSQUARE MEDIA INC |
| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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