Correlation Between Sprouts Farmers and Krispy Kreme
Can any of the company-specific risk be diversified away by investing in both Sprouts Farmers and Krispy Kreme 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 Krispy Kreme 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 Krispy Kreme, you can compare the effects of market volatilities on Sprouts Farmers and Krispy Kreme 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 Krispy Kreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprouts Farmers and Krispy Kreme.
Diversification Opportunities for Sprouts Farmers and Krispy Kreme
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sprouts and Krispy is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sprouts Farmers Market and Krispy Kreme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krispy Kreme 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 Krispy Kreme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krispy Kreme has no effect on the direction of Sprouts Farmers i.e., Sprouts Farmers and Krispy Kreme go up and down completely randomly.
Pair Corralation between Sprouts Farmers and Krispy Kreme
Considering the 90-day investment horizon Sprouts Farmers Market is expected to generate 0.89 times more return on investment than Krispy Kreme. However, Sprouts Farmers Market is 1.13 times less risky than Krispy Kreme. It trades about 0.46 of its potential returns per unit of risk. Krispy Kreme is currently generating about -0.15 per unit of risk. If you would invest 13,296 in Sprouts Farmers Market on November 2, 2024 and sell it today you would earn a total of 2,215 from holding Sprouts Farmers Market or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprouts Farmers Market vs. Krispy Kreme
Performance |
| Timeline |
| Sprouts Farmers Market |
| Krispy Kreme |
Sprouts Farmers and Krispy Kreme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprouts Farmers and Krispy Kreme
The main advantage of trading using opposite Sprouts Farmers and Krispy Kreme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprouts Farmers position performs unexpectedly, Krispy Kreme 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 Krispy Kreme will offset losses from the drop in Krispy Kreme's long position.| Sprouts Farmers vs. Natural Grocers by | Sprouts Farmers vs. Albertsons Companies | Sprouts Farmers vs. Ingles Markets Incorporated | Sprouts Farmers vs. Village Super Market |
| Krispy Kreme vs. Natural Grocers by | Krispy Kreme vs. Sprouts Farmers Market | Krispy Kreme vs. Albertsons Companies | Krispy Kreme vs. Ingles Markets Incorporated |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |