Correlation Between SPARTAN STORES and ABO GROUP
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and ABO 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 SPARTAN STORES and ABO GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and ABO GROUP ENVIRONMENT, you can compare the effects of market volatilities on SPARTAN STORES and ABO 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 SPARTAN STORES with a short position of ABO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and ABO GROUP.
Diversification Opportunities for SPARTAN STORES and ABO GROUP
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPARTAN and ABO is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and ABO GROUP ENVIRONMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABO GROUP ENVIRONMENT 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 ABO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABO GROUP ENVIRONMENT has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and ABO GROUP go up and down completely randomly.
Pair Corralation between SPARTAN STORES and ABO GROUP
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 2.0 times more return on investment than ABO GROUP. However, SPARTAN STORES is 2.0 times more volatile than ABO GROUP ENVIRONMENT. It trades about -0.12 of its potential returns per unit of risk. ABO GROUP ENVIRONMENT is currently generating about -0.26 per unit of risk. If you would invest 1,970 in SPARTAN STORES on August 30, 2024 and sell it today you would lose (190.00) from holding SPARTAN STORES or give up 9.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. ABO GROUP ENVIRONMENT
Performance |
| Timeline |
| SPARTAN STORES |
| ABO GROUP ENVIRONMENT |
SPARTAN STORES and ABO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and ABO GROUP
The main advantage of trading using opposite SPARTAN STORES and ABO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, ABO 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 ABO GROUP will offset losses from the drop in ABO GROUP's long position.| SPARTAN STORES vs. Lion One Metals | SPARTAN STORES vs. GALENA MINING LTD | SPARTAN STORES vs. AIR PRODCHEMICALS | SPARTAN STORES vs. CHEMICAL INDUSTRIES |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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