Correlation Between SPARTAN STORES and Sunrun

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

By analyzing existing cross correlation between SPARTAN STORES and Sunrun Inc, you can compare the effects of market volatilities on SPARTAN STORES and Sunrun 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 Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Sunrun.

Diversification Opportunities for SPARTAN STORES and Sunrun

-0.58

Correlation Coefficient

SPARTAN STORES  Sunrun

Excellent diversification

The 3 months correlation between SPARTAN and Sunrun is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc 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 Sunrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrun Inc has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Sunrun go up and down completely randomly.

Pair Corralation between SPARTAN STORES and Sunrun

Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 0.51 times more return on investment than Sunrun. However, SPARTAN STORES is 1.97 times less risky than Sunrun. It trades about 0.01 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.15 per unit of risk. If you would invest  1,830  in SPARTAN STORES on December 21, 2024 and sell it today you would earn a total of  0.00  from holding SPARTAN STORES or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

SPARTAN STORES  vs.  Sunrun Inc

SPARTAN STORES

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPARTAN STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, SPARTAN STORES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sunrun Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunrun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SPARTAN STORES and Sunrun

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

The idea behind SPARTAN STORES and Sunrun Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.