Correlation Between Sprouts Farmers and Atacado SA
Can any of the company-specific risk be diversified away by investing in both Sprouts Farmers and Atacado SA 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 Sprouts Farmers and Atacado SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprouts Farmers Market and Atacado SA, you can compare the effects of market volatilities on Sprouts Farmers and Atacado SA 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 Sprouts Farmers with a short position of Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprouts Farmers and Atacado SA.
Diversification Opportunities for Sprouts Farmers and Atacado SA
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sprouts and Atacado is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sprouts Farmers Market and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA and Sprouts Farmers 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 Sprouts Farmers Market are associated (or correlated) with Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of Sprouts Farmers i.e., Sprouts Farmers and Atacado SA go up and down completely randomly.
Pair Corralation between Sprouts Farmers and Atacado SA
Considering the 90-day investment horizon Sprouts Farmers Market is expected to generate 34.34 times more return on investment than Atacado SA. However, Sprouts Farmers is 34.34 times more volatile than Atacado SA. It trades about 0.16 of its potential returns per unit of risk. Atacado SA is currently generating about 0.14 per unit of risk. If you would invest 3,416 in Sprouts Farmers Market on September 3, 2024 and sell it today you would earn a total of 12,032 from holding Sprouts Farmers Market or generate 352.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.89% |
| Values | Daily Returns |
Sprouts Farmers Market vs. Atacado SA
Performance |
| Timeline |
| Sprouts Farmers Market |
| Atacado SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sprouts Farmers and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprouts Farmers and Atacado SA
The main advantage of trading using opposite Sprouts Farmers and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprouts Farmers position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| Sprouts Farmers vs. Sendas Distribuidora SA | Sprouts Farmers vs. Natural Grocers by | Sprouts Farmers vs. Albertsons Companies | Sprouts Farmers vs. Ingles Markets Incorporated |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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