Correlation Between Chefs Warehouse and SpartanNash

Can any of the company-specific risk be diversified away by investing in both Chefs Warehouse and SpartanNash 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 Chefs Warehouse and SpartanNash into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Chefs Warehouse and SpartanNash Co, you can compare the effects of market volatilities on Chefs Warehouse and SpartanNash 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 Chefs Warehouse with a short position of SpartanNash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and SpartanNash.

Diversification Opportunities for Chefs Warehouse and SpartanNash

0.53

Correlation Coefficient

Chefs Warehouse  SpartanNash

Very weak diversification

The 3 months correlation between Chefs and SpartanNash is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash and Chefs Warehouse 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 The Chefs Warehouse are associated (or correlated) with SpartanNash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpartanNash has no effect on the direction of Chefs Warehouse i.e., Chefs Warehouse and SpartanNash go up and down completely randomly.

Pair Corralation between Chefs Warehouse and SpartanNash

Given the investment horizon of 90 days Chefs Warehouse is expected to generate 1.24 times less return on investment than SpartanNash. In addition to that, Chefs Warehouse is 1.13 times more volatile than SpartanNash Co. It trades about 0.07 of its total potential returns per unit of risk. SpartanNash Co is currently generating about 0.1 per unit of volatility. If you would invest  1,783  in SpartanNash Co on December 30, 2024 and sell it today you would earn a total of  220.00  from holding SpartanNash Co or generate 12.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Chefs Warehouse  vs.  SpartanNash Co

Chefs Warehouse

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Chefs Warehouse are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Chefs Warehouse may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SpartanNash

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SpartanNash Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, SpartanNash displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chefs Warehouse and SpartanNash

The main advantage of trading using opposite Chefs Warehouse and SpartanNash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chefs Warehouse position performs unexpectedly, SpartanNash 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 SpartanNash will offset losses from the drop in SpartanNash's long position.

The idea behind The Chefs Warehouse and SpartanNash Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.