Correlation Between SpartanNash and Sysco

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

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

Diversification Opportunities for SpartanNash and Sysco

0.08

Correlation Coefficient

SpartanNash  Sysco

Significant diversification

The 3 months correlation between SpartanNash and Sysco is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SpartanNash Co and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco and SpartanNash 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 SpartanNash Co are associated (or correlated) with Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of SpartanNash i.e., SpartanNash and Sysco go up and down completely randomly.

Pair Corralation between SpartanNash and Sysco

Given the investment horizon of 90 days SpartanNash Co is expected to under-perform the Sysco. In addition to that, SpartanNash is 1.99 times more volatile than Sysco. It trades about -0.1 of its total potential returns per unit of risk. Sysco is currently generating about -0.01 per unit of volatility. If you would invest  7,775  in Sysco on September 3, 2024 and sell it today you would lose (64.00) from holding Sysco or give up 0.82% of portfolio value over 90 days.

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

SpartanNash Co  vs.  Sysco

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sysco

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with SpartanNash and Sysco

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

The idea behind SpartanNash Co and Sysco 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.