Correlation Between SPARTAN STORES and Corporate Office
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and Corporate Office 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 Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Corporate Office Properties, you can compare the effects of market volatilities on SPARTAN STORES and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Corporate Office.
Diversification Opportunities for SPARTAN STORES and Corporate Office
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPARTAN and Corporate is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Corporate Office go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Corporate Office
Assuming the 90 days trading horizon SPARTAN STORES is expected to under-perform the Corporate Office. In addition to that, SPARTAN STORES is 2.2 times more volatile than Corporate Office Properties. It trades about -0.09 of its total potential returns per unit of risk. Corporate Office Properties is currently generating about 0.16 per unit of volatility. If you would invest 2,920 in Corporate Office Properties on September 2, 2024 and sell it today you would earn a total of 160.00 from holding Corporate Office Properties or generate 5.48% 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. Corporate Office Properties
Performance |
| Timeline |
| SPARTAN STORES |
| Corporate Office Pro |
SPARTAN STORES and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTAN STORES and Corporate Office
The main advantage of trading using opposite SPARTAN STORES and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's 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 |
| Corporate Office vs. Compagnie Plastic Omnium | Corporate Office vs. Chiba Bank | Corporate Office vs. EAGLE MATERIALS | Corporate Office vs. The Hanover Insurance |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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