Correlation Between SPARTAN STORES and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and CNH Industrial 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 CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and CNH Industrial NV, you can compare the effects of market volatilities on SPARTAN STORES and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and CNH Industrial.
Diversification Opportunities for SPARTAN STORES and CNH Industrial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPARTAN and CNH is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and CNH Industrial go up and down completely randomly.
Pair Corralation between SPARTAN STORES and CNH Industrial
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 2.81 times less return on investment than CNH Industrial. But when comparing it to its historical volatility, SPARTAN STORES is 1.32 times less risky than CNH Industrial. It trades about 0.21 of its potential returns per unit of risk. CNH Industrial NV is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 954.00 in CNH Industrial NV on September 14, 2024 and sell it today you would earn a total of 205.00 from holding CNH Industrial NV or generate 21.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. CNH Industrial NV
Performance |
| Timeline |
| SPARTAN STORES |
| CNH Industrial NV |
SPARTAN STORES and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and CNH Industrial
The main advantage of trading using opposite SPARTAN STORES and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc |
| CNH Industrial vs. Burlington Stores | CNH Industrial vs. SPARTAN STORES | CNH Industrial vs. Collins Foods Limited | CNH Industrial vs. MOLSON RS BEVERAGE |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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