Correlation Between SPARTAN STORES and Fortive
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and Fortive 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 Fortive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Fortive, you can compare the effects of market volatilities on SPARTAN STORES and Fortive 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 Fortive. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Fortive.
Diversification Opportunities for SPARTAN STORES and Fortive
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPARTAN and Fortive is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Fortive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortive 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 Fortive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortive has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Fortive go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Fortive
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 1.37 times more return on investment than Fortive. However, SPARTAN STORES is 1.37 times more volatile than Fortive. It trades about 0.21 of its potential returns per unit of risk. Fortive is currently generating about 0.22 per unit of risk. If you would invest 1,709 in SPARTAN STORES on September 14, 2024 and sell it today you would earn a total of 121.00 from holding SPARTAN STORES or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. Fortive
Performance |
| Timeline |
| SPARTAN STORES |
| Fortive |
SPARTAN STORES and Fortive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Fortive
The main advantage of trading using opposite SPARTAN STORES and Fortive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, Fortive 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 Fortive will offset losses from the drop in Fortive's long position.| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc |
| Fortive vs. Lifeway Foods | Fortive vs. SPARTAN STORES | Fortive vs. COFCO Joycome Foods | Fortive vs. JIAHUA STORES |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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