Correlation Between SPARTAN STORES and Ross Stores
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Ross Stores, you can compare the effects of market volatilities on SPARTAN STORES and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Ross Stores.
Diversification Opportunities for SPARTAN STORES and Ross Stores
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPARTAN and Ross is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Ross Stores go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Ross Stores
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Ross Stores. In addition to that, SPARTAN STORES is 1.27 times more volatile than Ross Stores. It trades about -0.06 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.07 per unit of volatility. If you would invest 13,559 in Ross Stores on September 2, 2024 and sell it today you would earn a total of 1,077 from holding Ross Stores or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPARTAN STORES vs. Ross Stores
Performance |
| Timeline |
| SPARTAN STORES |
| Ross Stores |
SPARTAN STORES and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Ross Stores
The main advantage of trading using opposite SPARTAN STORES and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. Darden Restaurants | SPARTAN STORES vs. Reliance Steel Aluminum | SPARTAN STORES vs. Q2M Managementberatung AG |
| Ross Stores vs. Jacquet Metal Service | Ross Stores vs. POWER METALS | Ross Stores vs. Federal Agricultural Mortgage | Ross Stores vs. FIREWEED METALS P |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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