Correlation Between Bunzl Plc and SpartanNash
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc and SpartanNash 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 Bunzl Plc and SpartanNash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and SpartanNash Co, you can compare the effects of market volatilities on Bunzl Plc and SpartanNash 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 Bunzl Plc with a short position of SpartanNash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and SpartanNash.
Diversification Opportunities for Bunzl Plc and SpartanNash
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bunzl and SpartanNash is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash and Bunzl Plc 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 Bunzl plc are associated (or correlated) with SpartanNash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpartanNash has no effect on the direction of Bunzl Plc i.e., Bunzl Plc and SpartanNash go up and down completely randomly.
Pair Corralation between Bunzl Plc and SpartanNash
Assuming the 90 days horizon Bunzl plc is expected to generate 0.41 times more return on investment than SpartanNash. However, Bunzl plc is 2.43 times less risky than SpartanNash. It trades about 0.04 of its potential returns per unit of risk. SpartanNash Co is currently generating about -0.14 per unit of risk. If you would invest 4,438 in Bunzl plc on August 31, 2024 and sell it today you would earn a total of 38.00 from holding Bunzl plc or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bunzl plc vs. SpartanNash Co
Performance |
| Timeline |
| Bunzl plc |
| SpartanNash |
Bunzl Plc and SpartanNash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl Plc and SpartanNash
The main advantage of trading using opposite Bunzl Plc and SpartanNash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc position performs unexpectedly, SpartanNash 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 SpartanNash will offset losses from the drop in SpartanNash's long position.| Bunzl Plc vs. Seychelle Environmtl | Bunzl Plc vs. Energy and Water | Bunzl Plc vs. One World Universe | Bunzl Plc vs. Vow ASA |
| SpartanNash vs. Performance Food Group | SpartanNash vs. US Foods Holding | SpartanNash vs. Calavo Growers | SpartanNash vs. The Andersons |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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