Correlation Between SPARTAN STORES and American Public
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and American Public 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 American Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and American Public Education, you can compare the effects of market volatilities on SPARTAN STORES and American Public 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 American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and American Public.
Diversification Opportunities for SPARTAN STORES and American Public
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and American is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education 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 American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and American Public go up and down completely randomly.
Pair Corralation between SPARTAN STORES and American Public
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 0.63 times more return on investment than American Public. However, SPARTAN STORES is 1.58 times less risky than American Public. It trades about -0.26 of its potential returns per unit of risk. American Public Education is currently generating about -0.3 per unit of risk. If you would invest 1,870 in SPARTAN STORES on October 14, 2024 and sell it today you would lose (120.00) from holding SPARTAN STORES or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. American Public Education
Performance |
| Timeline |
| SPARTAN STORES |
| American Public Education |
SPARTAN STORES and American Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and American Public
The main advantage of trading using opposite SPARTAN STORES and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.| SPARTAN STORES vs. PKSHA TECHNOLOGY INC | SPARTAN STORES vs. BioNTech SE | SPARTAN STORES vs. Digilife Technologies Limited | SPARTAN STORES vs. CLEAN ENERGY FUELS |
| American Public vs. MCEWEN MINING INC | American Public vs. SPARTAN STORES | American Public vs. COSTCO WHOLESALE CDR | American Public vs. ARDAGH METAL PACDL 0001 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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