Correlation Between Innovative Food and SpartanNash

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

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

Diversification Opportunities for Innovative Food and SpartanNash

0.24

Correlation Coefficient

Innovative Food  SpartanNash

Modest diversification

The 3 months correlation between Innovative and SpartanNash is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Food Hldg and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash and Innovative Food 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 Innovative Food Hldg 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 Innovative Food i.e., Innovative Food and SpartanNash go up and down completely randomly.

Pair Corralation between Innovative Food and SpartanNash

Given the investment horizon of 90 days Innovative Food Hldg is expected to generate 0.95 times more return on investment than SpartanNash. However, Innovative Food Hldg is 1.05 times less risky than SpartanNash. It trades about 0.31 of its potential returns per unit of risk. SpartanNash Co is currently generating about 0.16 per unit of risk. If you would invest  202.00  in Innovative Food Hldg on December 1, 2024 and sell it today you would earn a total of  39.00  from holding Innovative Food Hldg or generate 19.31% return on investment over 90 days.

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

Innovative Food Hldg  vs.  SpartanNash Co

Innovative Food Hldg

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Food Hldg are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Innovative Food demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SpartanNash

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SpartanNash Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, SpartanNash may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Innovative Food and SpartanNash

The main advantage of trading using opposite Innovative Food and SpartanNash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Food 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 Innovative Food Hldg 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.