Correlation Between Tootsie Roll and SpartanNash

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

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

Diversification Opportunities for Tootsie Roll and SpartanNash

-0.63

Correlation Coefficient

Tootsie Roll  SpartanNash

Excellent diversification

The 3 months correlation between Tootsie and SpartanNash is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and SpartanNash Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpartanNash and Tootsie Roll 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 Tootsie Roll Industries 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 Tootsie Roll i.e., Tootsie Roll and SpartanNash go up and down completely randomly.

Pair Corralation between Tootsie Roll and SpartanNash

Allowing for the 90-day total investment horizon Tootsie Roll Industries is expected to generate 0.58 times more return on investment than SpartanNash. However, Tootsie Roll Industries is 1.73 times less risky than SpartanNash. It trades about 0.01 of its potential returns per unit of risk. SpartanNash Co is currently generating about -0.05 per unit of risk. If you would invest  3,210  in Tootsie Roll Industries on September 14, 2024 and sell it today you would earn a total of  2.00  from holding Tootsie Roll Industries or generate 0.06% return on investment over 90 days.

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

Tootsie Roll Industries  vs.  SpartanNash Co

Tootsie Roll Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tootsie Roll Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Tootsie Roll is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

SpartanNash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SpartanNash Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Tootsie Roll and SpartanNash

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

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.