Correlation Between Sprouts Farmers and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Sprouts Farmers and Lonza Group 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 Lonza Group 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 Lonza Group, you can compare the effects of market volatilities on Sprouts Farmers and Lonza Group 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 Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprouts Farmers and Lonza Group.
Diversification Opportunities for Sprouts Farmers and Lonza Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sprouts and Lonza is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sprouts Farmers Market and Lonza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group 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 Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group has no effect on the direction of Sprouts Farmers i.e., Sprouts Farmers and Lonza Group go up and down completely randomly.
Pair Corralation between Sprouts Farmers and Lonza Group
Considering the 90-day investment horizon Sprouts Farmers Market is expected to generate 0.61 times more return on investment than Lonza Group. However, Sprouts Farmers Market is 1.65 times less risky than Lonza Group. It trades about 0.49 of its potential returns per unit of risk. Lonza Group is currently generating about -0.01 per unit of risk. If you would invest 13,179 in Sprouts Farmers Market on September 3, 2024 and sell it today you would earn a total of 2,269 from holding Sprouts Farmers Market or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprouts Farmers Market vs. Lonza Group
Performance |
| Timeline |
| Sprouts Farmers Market |
| Lonza Group |
Sprouts Farmers and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprouts Farmers and Lonza Group
The main advantage of trading using opposite Sprouts Farmers and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprouts Farmers position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group'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 |
| Lonza Group vs. China New Energy | Lonza Group vs. Sonic Healthcare Ltd | Lonza Group vs. Charles River Laboratories | Lonza Group vs. Qiagen NV |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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