Correlation Between SPARTAN STORES and Toll Brothers
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and Toll Brothers 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 Toll Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Toll Brothers, you can compare the effects of market volatilities on SPARTAN STORES and Toll Brothers 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 Toll Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Toll Brothers.
Diversification Opportunities for SPARTAN STORES and Toll Brothers
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and Toll is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Toll Brothers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toll Brothers 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 Toll Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toll Brothers has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Toll Brothers go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Toll Brothers
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Toll Brothers. But the stock apears to be less risky and, when comparing its historical volatility, SPARTAN STORES is 1.04 times less risky than Toll Brothers. The stock trades about -0.03 of its potential returns per unit of risk. The Toll Brothers is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,567 in Toll Brothers on September 3, 2024 and sell it today you would earn a total of 11,508 from holding Toll Brothers or generate 251.98% 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. Toll Brothers
Performance |
| Timeline |
| SPARTAN STORES |
| Toll Brothers |
SPARTAN STORES and Toll Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Toll Brothers
The main advantage of trading using opposite SPARTAN STORES and Toll Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, Toll Brothers 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 Toll Brothers will offset losses from the drop in Toll Brothers' long position.| SPARTAN STORES vs. Playa Hotels Resorts | SPARTAN STORES vs. TYSON FOODS A | SPARTAN STORES vs. Host Hotels Resorts | SPARTAN STORES vs. Pebblebrook Hotel Trust |
| Toll Brothers vs. Sekisui Chemical Co | Toll Brothers vs. BARRATT DEVEL UNSPADR2 | Toll Brothers vs. Superior Plus Corp | Toll Brothers vs. NMI Holdings |
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.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |