Correlation Between SPARTAN STORES and CanSino Biologics

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Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and CanSino Biologics 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 CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and CanSino Biologics, you can compare the effects of market volatilities on SPARTAN STORES and CanSino Biologics 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 CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and CanSino Biologics.

Diversification Opportunities for SPARTAN STORES and CanSino Biologics

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between SPARTAN and CanSino is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics 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 CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and CanSino Biologics go up and down completely randomly.

Pair Corralation between SPARTAN STORES and CanSino Biologics

Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 9.45 times less return on investment than CanSino Biologics. But when comparing it to its historical volatility, SPARTAN STORES is 2.14 times less risky than CanSino Biologics. It trades about 0.02 of its potential returns per unit of risk. CanSino Biologics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  228.00  in CanSino Biologics on September 29, 2024 and sell it today you would earn a total of  136.00  from holding CanSino Biologics or generate 59.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SPARTAN STORES  vs.  CanSino Biologics

 Performance 
       Timeline  
SPARTAN STORES 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest uncertain performance, the Stock's forward-looking indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
CanSino Biologics 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CanSino Biologics unveiled solid returns over the last few months and may actually be approaching a breakup point.

SPARTAN STORES and CanSino Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPARTAN STORES and CanSino Biologics

The main advantage of trading using opposite SPARTAN STORES and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.
The idea behind SPARTAN STORES and CanSino Biologics 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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