Correlation Between SPARTAN STORES and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and CEOTRONICS, you can compare the effects of market volatilities on SPARTAN STORES and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and CEOTRONICS (CEKSG).
Diversification Opportunities for SPARTAN STORES and CEOTRONICS (CEKSG)
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPARTAN and CEOTRONICS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between SPARTAN STORES and CEOTRONICS (CEKSG)
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 13.48 times less return on investment than CEOTRONICS (CEKSG). But when comparing it to its historical volatility, SPARTAN STORES is 1.87 times less risky than CEOTRONICS (CEKSG). It trades about 0.05 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 605.00 in CEOTRONICS on December 13, 2024 and sell it today you would earn a total of 295.00 from holding CEOTRONICS or generate 48.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. CEOTRONICS
Performance |
| Timeline |
| SPARTAN STORES |
| CEOTRONICS (CEKSG) |
SPARTAN STORES and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and CEOTRONICS (CEKSG)
The main advantage of trading using opposite SPARTAN STORES and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.| SPARTAN STORES vs. FANDIFI TECHNOLOGY P | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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