Correlation Between SPARTA FIAGRO and SPARTA INFRA
Can any of the company-specific risk be diversified away by investing in both SPARTA FIAGRO and SPARTA INFRA 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 SPARTA FIAGRO and SPARTA INFRA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPARTA FIAGRO FDO and SPARTA INFRA FIC, you can compare the effects of market volatilities on SPARTA FIAGRO and SPARTA INFRA 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 SPARTA FIAGRO with a short position of SPARTA INFRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTA FIAGRO and SPARTA INFRA.
Diversification Opportunities for SPARTA FIAGRO and SPARTA INFRA
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPARTA and SPARTA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SPARTA FIAGRO FDO and SPARTA INFRA FIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTA INFRA FIC and SPARTA FIAGRO 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 SPARTA FIAGRO FDO are associated (or correlated) with SPARTA INFRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTA INFRA FIC has no effect on the direction of SPARTA FIAGRO i.e., SPARTA FIAGRO and SPARTA INFRA go up and down completely randomly.
Pair Corralation between SPARTA FIAGRO and SPARTA INFRA
Assuming the 90 days trading horizon SPARTA FIAGRO FDO is expected to under-perform the SPARTA INFRA. In addition to that, SPARTA FIAGRO is 1.48 times more volatile than SPARTA INFRA FIC. It trades about -0.28 of its total potential returns per unit of risk. SPARTA INFRA FIC is currently generating about -0.14 per unit of volatility. If you would invest 10,320 in SPARTA INFRA FIC on September 1, 2024 and sell it today you would lose (200.00) from holding SPARTA INFRA FIC or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
SPARTA FIAGRO FDO vs. SPARTA INFRA FIC
Performance |
| Timeline |
| SPARTA FIAGRO FDO |
| SPARTA INFRA FIC |
SPARTA FIAGRO and SPARTA INFRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPARTA FIAGRO and SPARTA INFRA
The main advantage of trading using opposite SPARTA FIAGRO and SPARTA INFRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTA FIAGRO position performs unexpectedly, SPARTA INFRA 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 INFRA will offset losses from the drop in SPARTA INFRA's long position.| SPARTA FIAGRO vs. TRX Renda Fundo | SPARTA FIAGRO vs. Fundos de Investimento | SPARTA FIAGRO vs. Guardian Logistica Fundo | SPARTA FIAGRO vs. Aesapar Fundo de |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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