Correlation Between SPARTAN STORES and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and MEDICAL FACILITIES 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 SPARTAN STORES and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on SPARTAN STORES and MEDICAL FACILITIES 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 SPARTAN STORES with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and MEDICAL FACILITIES.
Diversification Opportunities for SPARTAN STORES and MEDICAL FACILITIES
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and MEDICAL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and SPARTAN STORES 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 SPARTAN STORES are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between SPARTAN STORES and MEDICAL FACILITIES
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 26.02 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, SPARTAN STORES is 1.14 times less risky than MEDICAL FACILITIES. It trades about 0.01 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,020 in MEDICAL FACILITIES NEW on November 7, 2024 and sell it today you would earn a total of 60.00 from holding MEDICAL FACILITIES NEW or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPARTAN STORES vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| SPARTAN STORES |
| MEDICAL FACILITIES NEW |
SPARTAN STORES and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and MEDICAL FACILITIES
The main advantage of trading using opposite SPARTAN STORES and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc |
| MEDICAL FACILITIES vs. Granite Construction | MEDICAL FACILITIES vs. Federal Agricultural Mortgage | MEDICAL FACILITIES vs. FARM 51 GROUP | MEDICAL FACILITIES vs. Hanison Construction Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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