Correlation Between SPARTAN STORES and Pampa Energa
Can any of the company-specific risk be diversified away by investing in both SPARTAN STORES and Pampa Energa 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 Pampa Energa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTAN STORES and Pampa Energa SA, you can compare the effects of market volatilities on SPARTAN STORES and Pampa Energa 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 Pampa Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTAN STORES and Pampa Energa.
Diversification Opportunities for SPARTAN STORES and Pampa Energa
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPARTAN and Pampa is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SPARTAN STORES and Pampa Energa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energa SA 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 Pampa Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energa SA has no effect on the direction of SPARTAN STORES i.e., SPARTAN STORES and Pampa Energa go up and down completely randomly.
Pair Corralation between SPARTAN STORES and Pampa Energa
Assuming the 90 days trading horizon SPARTAN STORES is expected to generate 0.6 times more return on investment than Pampa Energa. However, SPARTAN STORES is 1.68 times less risky than Pampa Energa. It trades about 0.15 of its potential returns per unit of risk. Pampa Energa SA is currently generating about 0.02 per unit of risk. If you would invest 1,768 in SPARTAN STORES on September 25, 2024 and sell it today you would earn a total of 82.00 from holding SPARTAN STORES or generate 4.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SPARTAN STORES vs. Pampa Energa SA
Performance |
Timeline |
SPARTAN STORES |
Pampa Energa SA |
SPARTAN STORES and Pampa Energa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPARTAN STORES and Pampa Energa
The main advantage of trading using opposite SPARTAN STORES and Pampa Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTAN STORES position performs unexpectedly, Pampa Energa 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 Pampa Energa will offset losses from the drop in Pampa Energa's long position.SPARTAN STORES vs. Zoom Video Communications | SPARTAN STORES vs. SERI INDUSTRIAL EO | SPARTAN STORES vs. Evolution Mining Limited | SPARTAN STORES vs. Tencent Music Entertainment |
Pampa Energa vs. Siemens Energy AG | Pampa Energa vs. Vistra Corp | Pampa Energa vs. Datang International Power | Pampa Energa vs. Contact Energy Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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