Correlation Between PARKSON RETAIL and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both PARKSON RETAIL and SPARTAN 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 PARKSON RETAIL and SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKSON RETAIL GRP and SPARTAN STORES, you can compare the effects of market volatilities on PARKSON RETAIL and SPARTAN 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 PARKSON RETAIL with a short position of SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKSON RETAIL and SPARTAN STORES.
Diversification Opportunities for PARKSON RETAIL and SPARTAN STORES
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PARKSON and SPARTAN is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PARKSON RETAIL GRP and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES and PARKSON RETAIL 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 PARKSON RETAIL GRP are associated (or correlated) with SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of PARKSON RETAIL i.e., PARKSON RETAIL and SPARTAN STORES go up and down completely randomly.
Pair Corralation between PARKSON RETAIL and SPARTAN STORES
If you would invest 1,899 in SPARTAN STORES on August 2, 2024 and sell it today you would earn a total of 51.00 from holding SPARTAN STORES or generate 2.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 73.44% |
Values | Daily Returns |
PARKSON RETAIL GRP vs. SPARTAN STORES
Performance |
Timeline |
PARKSON RETAIL GRP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPARTAN STORES |
PARKSON RETAIL and SPARTAN STORES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PARKSON RETAIL and SPARTAN STORES
The main advantage of trading using opposite PARKSON RETAIL and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKSON RETAIL position performs unexpectedly, SPARTAN 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.PARKSON RETAIL vs. NMI Holdings | PARKSON RETAIL vs. SIVERS SEMICONDUCTORS AB | PARKSON RETAIL vs. REYNA SILVER P | PARKSON RETAIL vs. Darden Restaurants |
SPARTAN STORES vs. NMI Holdings | SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. REYNA SILVER P | SPARTAN STORES vs. Darden Restaurants |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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