Correlation Between Kesko Oyj and Sprouts Farmers
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Sprouts Farmers 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 Kesko Oyj and Sprouts Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kesko Oyj ADR and Sprouts Farmers Market, you can compare the effects of market volatilities on Kesko Oyj and Sprouts Farmers 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 Kesko Oyj with a short position of Sprouts Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Sprouts Farmers.
Diversification Opportunities for Kesko Oyj and Sprouts Farmers
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kesko and Sprouts is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Sprouts Farmers Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprouts Farmers Market and Kesko Oyj 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 Kesko Oyj ADR are associated (or correlated) with Sprouts Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprouts Farmers Market has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Sprouts Farmers go up and down completely randomly.
Pair Corralation between Kesko Oyj and Sprouts Farmers
Assuming the 90 days horizon Kesko Oyj is expected to generate 4.56 times less return on investment than Sprouts Farmers. In addition to that, Kesko Oyj is 1.14 times more volatile than Sprouts Farmers Market. It trades about 0.09 of its total potential returns per unit of risk. Sprouts Farmers Market is currently generating about 0.46 per unit of volatility. If you would invest 12,018 in Sprouts Farmers Market on August 27, 2024 and sell it today you would earn a total of 2,780 from holding Sprouts Farmers Market or generate 23.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kesko Oyj ADR vs. Sprouts Farmers Market
Performance |
| Timeline |
| Kesko Oyj ADR |
| Sprouts Farmers Market |
Kesko Oyj and Sprouts Farmers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Sprouts Farmers
The main advantage of trading using opposite Kesko Oyj and Sprouts Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Sprouts Farmers 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 Sprouts Farmers will offset losses from the drop in Sprouts Farmers' long position.| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj vs. Ingles Markets Incorporated |
| Sprouts Farmers vs. Innovative Food Hldg | Sprouts Farmers vs. Calavo Growers | Sprouts Farmers vs. The Chefs Warehouse | Sprouts Farmers vs. AMCON Distributing |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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