Correlation Between Retail Estates and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Retail Estates 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 Retail Estates and SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and SPARTAN STORES, you can compare the effects of market volatilities on Retail Estates 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 Retail Estates with a short position of SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and SPARTAN STORES.
Diversification Opportunities for Retail Estates and SPARTAN STORES
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retail and SPARTAN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES and Retail Estates 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 Retail Estates NV 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 Retail Estates i.e., Retail Estates and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Retail Estates and SPARTAN STORES
Assuming the 90 days horizon Retail Estates NV is expected to generate 0.71 times more return on investment than SPARTAN STORES. However, Retail Estates NV is 1.41 times less risky than SPARTAN STORES. It trades about 0.02 of its potential returns per unit of risk. SPARTAN STORES is currently generating about 0.0 per unit of risk. If you would invest 5,430 in Retail Estates NV on August 31, 2024 and sell it today you would earn a total of 430.00 from holding Retail Estates NV or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. SPARTAN STORES
Performance |
| Timeline |
| Retail Estates NV |
| SPARTAN STORES |
Retail Estates and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and SPARTAN STORES
The main advantage of trading using opposite Retail Estates and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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.| Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings | Retail Estates vs. Origin Agritech | Retail Estates vs. SIVERS SEMICONDUCTORS AB |
| SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. Darden Restaurants | SPARTAN STORES vs. Reliance Steel Aluminum | SPARTAN STORES vs. Q2M Managementberatung 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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