Correlation Between SPARTAN STORES and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and TRADEGATE 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 TRADEGATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and TRADEGATE, you can compare the effects of market volatilities on SPARTAN STORES and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and TRADEGATE.
Diversification Opportunities for SPARTAN STORES and TRADEGATE
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and TRADEGATE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and TRADEGATE go up and down completely randomly.
Pair Corralation between SPARTAN STORES and TRADEGATE
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 1.53 times more return on investment than TRADEGATE. However, SPARTAN STORES is 1.53 times more volatile than TRADEGATE. It trades about 0.02 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.1 per unit of risk. If you would invest 1,680 in SPARTAN STORES on October 13, 2024 and sell it today you would earn a total of 70.00 from holding SPARTAN STORES or generate 4.17% 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. TRADEGATE
Performance |
| Timeline |
| SPARTAN STORES |
| TRADEGATE |
SPARTAN STORES and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and TRADEGATE
The main advantage of trading using opposite SPARTAN STORES and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| SPARTAN STORES vs. Columbia Sportswear | SPARTAN STORES vs. WIMFARM SA EO | SPARTAN STORES vs. JD SPORTS FASH | SPARTAN STORES vs. Hitachi Construction Machinery |
| TRADEGATE vs. Easy Software AG | TRADEGATE vs. Minerals Technologies | TRADEGATE vs. SOFI TECHNOLOGIES | TRADEGATE vs. Chuangs China Investments |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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