Correlation Between SPARTAN STORES and HK Electric
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and HK Electric 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 HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and HK Electric Investments, you can compare the effects of market volatilities on SPARTAN STORES and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and HK Electric.
Diversification Opportunities for SPARTAN STORES and HK Electric
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and HKT is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and HK Electric go up and down completely randomly.
Pair Corralation between SPARTAN STORES and HK Electric
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the HK Electric. But the stock apears to be less risky and, when comparing its historical volatility, SPARTAN STORES is 1.66 times less risky than HK Electric. The stock trades about -0.02 of its potential returns per unit of risk. The HK Electric Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17.00 in HK Electric Investments on September 24, 2024 and sell it today you would earn a total of 47.00 from holding HK Electric Investments or generate 276.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SPARTAN STORES vs. HK Electric Investments
Performance |
| Timeline |
| SPARTAN STORES |
| HK Electric Investments |
SPARTAN STORES and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and HK Electric
The main advantage of trading using opposite SPARTAN STORES and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Microsoft |
| HK Electric vs. COSTCO WHOLESALE CDR | HK Electric vs. SPARTAN STORES | HK Electric vs. National Retail Properties | HK Electric vs. AEON 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |