Correlation Between Sprouts Farmers and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Sprouts Farmers and Kesko Oyj 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 Kesko Oyj 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 Kesko Oyj ADR, you can compare the effects of market volatilities on Sprouts Farmers and Kesko Oyj 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 Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprouts Farmers and Kesko Oyj.
Diversification Opportunities for Sprouts Farmers and Kesko Oyj
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sprouts and Kesko is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sprouts Farmers Market and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR 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 Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Sprouts Farmers i.e., Sprouts Farmers and Kesko Oyj go up and down completely randomly.
Pair Corralation between Sprouts Farmers and Kesko Oyj
Considering the 90-day investment horizon Sprouts Farmers Market is expected to generate 0.88 times more return on investment than Kesko Oyj. However, Sprouts Farmers Market is 1.14 times less risky than Kesko Oyj. It trades about 0.46 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.09 per unit of risk. 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 |
Sprouts Farmers Market vs. Kesko Oyj ADR
Performance |
| Timeline |
| Sprouts Farmers Market |
| Kesko Oyj ADR |
Sprouts Farmers and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprouts Farmers and Kesko Oyj
The main advantage of trading using opposite Sprouts Farmers and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprouts Farmers position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| Sprouts Farmers vs. Innovative Food Hldg | Sprouts Farmers vs. Calavo Growers | Sprouts Farmers vs. The Chefs Warehouse | Sprouts Farmers vs. AMCON Distributing |
| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |