Correlation Between Rite Aid and Sprouts Farmers
Can any of the company-specific risk be diversified away by investing in both Rite Aid and Sprouts Farmers 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 Rite Aid and Sprouts Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rite Aid and Sprouts Farmers Market, you can compare the effects of market volatilities on Rite Aid and Sprouts Farmers 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 Rite Aid with a short position of Sprouts Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rite Aid and Sprouts Farmers.
Diversification Opportunities for Rite Aid and Sprouts Farmers
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rite and Sprouts is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rite Aid and Sprouts Farmers Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprouts Farmers Market and Rite Aid 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 Rite Aid are associated (or correlated) with Sprouts Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprouts Farmers Market has no effect on the direction of Rite Aid i.e., Rite Aid and Sprouts Farmers go up and down completely randomly.
Pair Corralation between Rite Aid and Sprouts Farmers
If you would invest 5,172 in Sprouts Farmers Market on January 21, 2024 and sell it today you would earn a total of 1,343 from holding Sprouts Farmers Market or generate 25.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 1.56% |
Values | Daily Returns |
Rite Aid vs. Sprouts Farmers Market
Performance |
Timeline |
Rite Aid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sprouts Farmers Market |
Rite Aid and Sprouts Farmers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rite Aid and Sprouts Farmers
The main advantage of trading using opposite Rite Aid and Sprouts Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rite Aid position performs unexpectedly, Sprouts Farmers 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 Sprouts Farmers will offset losses from the drop in Sprouts Farmers' long position.Rite Aid vs. PetMed Express | Rite Aid vs. High Tide | Rite Aid vs. China Jo Jo Drugstores | Rite Aid vs. Bimi International Medical |
Sprouts Farmers vs. Aquagold International | Sprouts Farmers vs. Morningstar Unconstrained Allocation | Sprouts Farmers vs. Thrivent High Yield | Sprouts Farmers vs. Via Renewables |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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