Correlation Between Barclays ETN and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both Barclays ETN 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 Barclays ETN and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Shiller and Sparta Capital, you can compare the effects of market volatilities on Barclays ETN 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 Barclays ETN with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Sparta Capital.
Diversification Opportunities for Barclays ETN and Sparta Capital
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and Sparta is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Shiller and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and Barclays ETN 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 Barclays ETN Shiller 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 Barclays ETN i.e., Barclays ETN and Sparta Capital go up and down completely randomly.
Pair Corralation between Barclays ETN and Sparta Capital
Given the investment horizon of 90 days Barclays ETN is expected to generate 4.87 times less return on investment than Sparta Capital. But when comparing it to its historical volatility, Barclays ETN Shiller is 15.22 times less risky than Sparta Capital. It trades about 0.13 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 September 1, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Shiller vs. Sparta Capital
Performance |
| Timeline |
| Barclays ETN Shiller |
| Sparta Capital |
Barclays ETN and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Sparta Capital
The main advantage of trading using opposite Barclays ETN and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN 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.| Barclays ETN vs. VanEck China Bond | Barclays ETN vs. Barclays ETN Select | Barclays ETN vs. SPDR SSGA Large | Barclays ETN vs. Freedom 100 Emerging |
| Sparta Capital vs. Legacy Education | Sparta Capital vs. Apple Inc | Sparta Capital vs. NVIDIA | Sparta Capital vs. Microsoft |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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