Correlation Between SPARTAN STORES and Zhaojin Mining
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and Zhaojin Mining 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 Zhaojin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Zhaojin Mining Industry, you can compare the effects of market volatilities on SPARTAN STORES and Zhaojin Mining 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 Zhaojin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Zhaojin Mining.
Diversification Opportunities for SPARTAN STORES and Zhaojin Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPARTAN and Zhaojin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Zhaojin Mining Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhaojin Mining Industry 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 Zhaojin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhaojin Mining Industry has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Zhaojin Mining go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Zhaojin Mining
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 24.88 times less return on investment than Zhaojin Mining. But when comparing it to its historical volatility, SPARTAN STORES is 1.71 times less risky than Zhaojin Mining. It trades about 0.01 of its potential returns per unit of risk. Zhaojin Mining Industry is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 132.00 in Zhaojin Mining Industry on December 21, 2024 and sell it today you would earn a total of 50.00 from holding Zhaojin Mining Industry or generate 37.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SPARTAN STORES vs. Zhaojin Mining Industry
Performance |
Timeline |
SPARTAN STORES |
Zhaojin Mining Industry |
SPARTAN STORES and Zhaojin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPARTAN STORES and Zhaojin Mining
The main advantage of trading using opposite SPARTAN STORES and Zhaojin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, Zhaojin Mining 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 Zhaojin Mining will offset losses from the drop in Zhaojin Mining's long position.SPARTAN STORES vs. CANON MARKETING JP | SPARTAN STORES vs. AUTO TRADER ADR | SPARTAN STORES vs. Transport International Holdings | SPARTAN STORES vs. KAUFMAN ET BROAD |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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