Correlation Between SPARTAN STORES and UNIV HEALTH
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and UNIV HEALTH 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 UNIV HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and UNIV HEALTH SERV B, you can compare the effects of market volatilities on SPARTAN STORES and UNIV HEALTH 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 UNIV HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and UNIV HEALTH.
Diversification Opportunities for SPARTAN STORES and UNIV HEALTH
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPARTAN and UNIV is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and UNIV HEALTH SERV B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIV HEALTH SERV 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 UNIV HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIV HEALTH SERV has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and UNIV HEALTH go up and down completely randomly.
Pair Corralation between SPARTAN STORES and UNIV HEALTH
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 1.47 times more return on investment than UNIV HEALTH. However, SPARTAN STORES is 1.47 times more volatile than UNIV HEALTH SERV B. It trades about 0.2 of its potential returns per unit of risk. UNIV HEALTH SERV B is currently generating about 0.07 per unit of risk. If you would invest 1,690 in SPARTAN STORES on November 28, 2024 and sell it today you would earn a total of 220.00 from holding SPARTAN STORES or generate 13.02% 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. UNIV HEALTH SERV B
Performance |
| Timeline |
| SPARTAN STORES |
| UNIV HEALTH SERV |
SPARTAN STORES and UNIV HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and UNIV HEALTH
The main advantage of trading using opposite SPARTAN STORES and UNIV HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, UNIV HEALTH 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 UNIV HEALTH will offset losses from the drop in UNIV HEALTH's long position.| SPARTAN STORES vs. ANGANG STEEL H | SPARTAN STORES vs. CALTAGIRONE EDITORE | SPARTAN STORES vs. COMBA TELECOM SYST | SPARTAN STORES vs. TOMBADOR IRON LTD |
| UNIV HEALTH vs. MHP Hotel AG | UNIV HEALTH vs. Playa Hotels Resorts | UNIV HEALTH vs. InterContinental Hotels Group | UNIV HEALTH vs. Corporate Travel Management |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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