Correlation Between SPARTAN STORES and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and LyondellBasell Industries 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 LyondellBasell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and LyondellBasell Industries NV, you can compare the effects of market volatilities on SPARTAN STORES and LyondellBasell Industries 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 LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and LyondellBasell Industries.
Diversification Opportunities for SPARTAN STORES and LyondellBasell Industries
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPARTAN and LyondellBasell is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries 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 LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between SPARTAN STORES and LyondellBasell Industries
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the LyondellBasell Industries. In addition to that, SPARTAN STORES is 1.62 times more volatile than LyondellBasell Industries NV. It trades about -0.11 of its total potential returns per unit of risk. LyondellBasell Industries NV is currently generating about -0.02 per unit of volatility. If you would invest 8,026 in LyondellBasell Industries NV on August 30, 2024 and sell it today you would lose (96.00) from holding LyondellBasell Industries NV or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. LyondellBasell Industries NV
Performance |
| Timeline |
| SPARTAN STORES |
| LyondellBasell Industries |
SPARTAN STORES and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and LyondellBasell Industries
The main advantage of trading using opposite SPARTAN STORES and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.| SPARTAN STORES vs. Lion One Metals | SPARTAN STORES vs. GALENA MINING LTD | SPARTAN STORES vs. AIR PRODCHEMICALS | SPARTAN STORES vs. CHEMICAL INDUSTRIES |
| LyondellBasell Industries vs. Linde plc | LyondellBasell Industries vs. Superior Plus Corp | LyondellBasell Industries vs. NMI Holdings | LyondellBasell Industries vs. SIVERS SEMICONDUCTORS AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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