Correlation Between AdCapital and SPORTING
Can any of the company-specific risk be diversified away by investing in both AdCapital and SPORTING 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 AdCapital and SPORTING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdCapital AG and SPORTING, you can compare the effects of market volatilities on AdCapital and SPORTING 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 AdCapital with a short position of SPORTING. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdCapital and SPORTING.
Diversification Opportunities for AdCapital and SPORTING
Very good diversification
The 3 months correlation between AdCapital and SPORTING is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AdCapital AG and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING and AdCapital 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 AdCapital AG are associated (or correlated) with SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of AdCapital i.e., AdCapital and SPORTING go up and down completely randomly.
Pair Corralation between AdCapital and SPORTING
Assuming the 90 days horizon AdCapital AG is expected to under-perform the SPORTING. In addition to that, AdCapital is 1.86 times more volatile than SPORTING. It trades about -0.09 of its total potential returns per unit of risk. SPORTING is currently generating about 0.06 per unit of volatility. If you would invest 105.00 in SPORTING on September 13, 2024 and sell it today you would earn a total of 3.00 from holding SPORTING or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AdCapital AG vs. SPORTING
Performance |
| Timeline |
| AdCapital AG |
| SPORTING |
AdCapital and SPORTING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdCapital and SPORTING
The main advantage of trading using opposite AdCapital and SPORTING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdCapital position performs unexpectedly, SPORTING 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 SPORTING will offset losses from the drop in SPORTING's long position.| AdCapital vs. Hyatt Hotels | AdCapital vs. Summit Hotel Properties | AdCapital vs. Xenia Hotels Resorts | AdCapital vs. QINGCI GAMES INC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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