Correlation Between Sprouts Farmers and Casino Guichard

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

By analyzing existing cross correlation between Sprouts Farmers Market and Casino Guichard Perrachon, you can compare the effects of market volatilities on Sprouts Farmers and Casino Guichard 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 Sprouts Farmers with a short position of Casino Guichard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprouts Farmers and Casino Guichard.

Diversification Opportunities for Sprouts Farmers and Casino Guichard

-0.22

Correlation Coefficient

Sprouts Farmers  Casino Guichard

Very good diversification

The 3 months correlation between Sprouts and Casino is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sprouts Farmers Market and Casino Guichard Perrachon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casino Guichard Perrachon and Sprouts Farmers 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 Sprouts Farmers Market are associated (or correlated) with Casino Guichard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casino Guichard Perrachon has no effect on the direction of Sprouts Farmers i.e., Sprouts Farmers and Casino Guichard go up and down completely randomly.

Pair Corralation between Sprouts Farmers and Casino Guichard

If you would invest  10,544  in Sprouts Farmers Market on September 19, 2024 and sell it today you would earn a total of  3,316  from holding Sprouts Farmers Market or generate 31.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sprouts Farmers Market  vs.  Casino Guichard Perrachon

Sprouts Farmers Market

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprouts Farmers Market are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Sprouts Farmers displayed solid returns over the last few months and may actually be approaching a breakup point.

Casino Guichard Perrachon

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sprouts Farmers and Casino Guichard

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

The idea behind Sprouts Farmers Market and Casino Guichard Perrachon 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.