Correlation Between EQT AB and Sparta AG
Can any of the company-specific risk be diversified away by investing in both EQT AB and Sparta AG 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 EQT AB and Sparta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQT AB and Sparta AG, you can compare the effects of market volatilities on EQT AB and Sparta AG 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 EQT AB with a short position of Sparta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQT AB and Sparta AG.
Diversification Opportunities for EQT AB and Sparta AG
Excellent diversification
The 3 months correlation between EQT and Sparta is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding EQT AB and Sparta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta AG and EQT AB 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 EQT AB are associated (or correlated) with Sparta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta AG has no effect on the direction of EQT AB i.e., EQT AB and Sparta AG go up and down completely randomly.
Pair Corralation between EQT AB and Sparta AG
Assuming the 90 days horizon EQT AB is expected to under-perform the Sparta AG. In addition to that, EQT AB is 1.23 times more volatile than Sparta AG. It trades about -0.02 of its total potential returns per unit of risk. Sparta AG is currently generating about 0.12 per unit of volatility. If you would invest 2,440 in Sparta AG on August 24, 2024 and sell it today you would earn a total of 800.00 from holding Sparta AG or generate 32.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EQT AB vs. Sparta AG
Performance |
| Timeline |
| EQT AB |
| Sparta AG |
EQT AB and Sparta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQT AB and Sparta AG
The main advantage of trading using opposite EQT AB and Sparta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQT AB position performs unexpectedly, Sparta AG 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 Sparta AG will offset losses from the drop in Sparta AG's long position.| EQT AB vs. STMICROELECTRONICS | EQT AB vs. Ares Management Corp | EQT AB vs. METHODE ELECTRONICS | EQT AB vs. National Health Investors |
| Sparta AG vs. Cleanaway Waste Management | Sparta AG vs. SBM OFFSHORE | Sparta AG vs. DATANG INTL POW | Sparta AG vs. SIEM OFFSHORE NEW |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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