Correlation Between SpartanNash and Mission Produce

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

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

Diversification Opportunities for SpartanNash and Mission Produce

-0.37

Correlation Coefficient

SpartanNash  Mission Produce

Very good diversification

The 3 months correlation between SpartanNash and Mission is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SpartanNash Co and Mission Produce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mission Produce 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 Mission Produce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mission Produce has no effect on the direction of SpartanNash i.e., SpartanNash and Mission Produce go up and down completely randomly.

Pair Corralation between SpartanNash and Mission Produce

Given the investment horizon of 90 days SpartanNash Co is expected to under-perform the Mission Produce. In addition to that, SpartanNash is 1.16 times more volatile than Mission Produce. It trades about -0.17 of its total potential returns per unit of risk. Mission Produce is currently generating about 0.17 per unit of volatility. If you would invest  1,195  in Mission Produce on August 27, 2024 and sell it today you would earn a total of  114.00  from holding Mission Produce or generate 9.54% return on investment over 90 days.

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

SpartanNash Co  vs.  Mission Produce

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.

Mission Produce

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mission Produce are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Mission Produce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SpartanNash and Mission Produce

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

The idea behind SpartanNash Co and Mission Produce 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.