Correlation Between Atlanticus Holdings and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and Sparta Capital 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 Atlanticus Holdings and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlanticus Holdings Corp and Sparta Capital, you can compare the effects of market volatilities on Atlanticus Holdings and Sparta Capital 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 Atlanticus Holdings with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and Sparta Capital.
Diversification Opportunities for Atlanticus Holdings and Sparta Capital
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Atlanticus and Sparta is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings Corp and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and Atlanticus Holdings 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 Atlanticus Holdings Corp are associated (or correlated) with Sparta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta Capital has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Sparta Capital go up and down completely randomly.
Pair Corralation between Atlanticus Holdings and Sparta Capital
Assuming the 90 days horizon Atlanticus Holdings is expected to generate 4.26 times less return on investment than Sparta Capital. But when comparing it to its historical volatility, Atlanticus Holdings Corp is 9.08 times less risky than Sparta Capital. It trades about 0.08 of its potential returns per unit of risk. Sparta Capital is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.21 in Sparta Capital on August 27, 2024 and sell it today you would earn a total of 0.29 from holding Sparta Capital or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlanticus Holdings Corp vs. Sparta Capital
Performance |
| Timeline |
| Atlanticus Holdings Corp |
| Sparta Capital |
Atlanticus Holdings and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlanticus Holdings and Sparta Capital
The main advantage of trading using opposite Atlanticus Holdings and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings position performs unexpectedly, Sparta Capital 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 Capital will offset losses from the drop in Sparta Capital's long position.| Atlanticus Holdings vs. Babcock Wilcox Enterprises | Atlanticus Holdings vs. XOMA Corporation | Atlanticus Holdings vs. Brighthouse Financial | Atlanticus Holdings vs. Presidio Property Trust |
| Sparta Capital vs. Copa Holdings SA | Sparta Capital vs. United Airlines Holdings | Sparta Capital vs. Delta Air Lines | Sparta Capital vs. SkyWest |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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