Correlation Between SPARTAN STORES and China Resources
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and China Resources Land, you can compare the effects of market volatilities on SPARTAN STORES and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and China Resources.
Diversification Opportunities for SPARTAN STORES and China Resources
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPARTAN and China is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and China Resources go up and down completely randomly.
Pair Corralation between SPARTAN STORES and China Resources
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 0.91 times more return on investment than China Resources. However, SPARTAN STORES is 1.1 times less risky than China Resources. It trades about -0.08 of its potential returns per unit of risk. China Resources Land is currently generating about -0.17 per unit of risk. If you would invest 1,980 in SPARTAN STORES on September 3, 2024 and sell it today you would lose (200.00) from holding SPARTAN STORES or give up 10.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. China Resources Land
Performance |
| Timeline |
| SPARTAN STORES |
| China Resources Land |
SPARTAN STORES and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and China Resources
The main advantage of trading using opposite SPARTAN STORES and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| SPARTAN STORES vs. Playa Hotels Resorts | SPARTAN STORES vs. TYSON FOODS A | SPARTAN STORES vs. Host Hotels Resorts | SPARTAN STORES vs. Pebblebrook Hotel Trust |
| China Resources vs. QURATE RETAIL INC | China Resources vs. SPARTAN STORES | China Resources vs. FAST RETAIL ADR | China Resources vs. Computer And Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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