Correlation Between Sysco and SpartanNash

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

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

Diversification Opportunities for Sysco and SpartanNash

-0.02

Correlation Coefficient

Sysco  SpartanNash

Good diversification

The 3 months correlation between Sysco and SpartanNash is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sysco and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash and Sysco 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 Sysco 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 Sysco i.e., Sysco and SpartanNash go up and down completely randomly.

Pair Corralation between Sysco and SpartanNash

Considering the 90-day investment horizon Sysco is expected to under-perform the SpartanNash. But the stock apears to be less risky and, when comparing its historical volatility, Sysco is 1.57 times less risky than SpartanNash. The stock trades about -0.03 of its potential returns per unit of risk. The SpartanNash Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,876  in SpartanNash Co on November 29, 2024 and sell it today you would earn a total of  118.00  from holding SpartanNash Co or generate 6.29% return on investment over 90 days.

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

Sysco  vs.  SpartanNash Co

Sysco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sysco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 March 2025.

Pair Trading with Sysco and SpartanNash

The main advantage of trading using opposite Sysco and SpartanNash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysco 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 Sysco 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.