Correlation Between Intertek Group and SPAR
Can any of the company-specific risk be diversified away by investing in both Intertek Group and SPAR 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 Intertek Group and SPAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intertek Group Plc and SPAR Group, you can compare the effects of market volatilities on Intertek Group and SPAR 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 Intertek Group with a short position of SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertek Group and SPAR.
Diversification Opportunities for Intertek Group and SPAR
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intertek and SPAR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Intertek Group Plc and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and Intertek Group 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 Intertek Group Plc are associated (or correlated) with SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of Intertek Group i.e., Intertek Group and SPAR go up and down completely randomly.
Pair Corralation between Intertek Group and SPAR
Assuming the 90 days horizon Intertek Group Plc is expected to under-perform the SPAR. But the pink sheet apears to be less risky and, when comparing its historical volatility, Intertek Group Plc is 1.14 times less risky than SPAR. The pink sheet trades about -0.29 of its potential returns per unit of risk. The SPAR Group is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 241.00 in SPAR Group on August 24, 2024 and sell it today you would lose (16.00) from holding SPAR Group or give up 6.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertek Group Plc vs. SPAR Group
Performance |
| Timeline |
| Intertek Group Plc |
| SPAR Group |
Intertek Group and SPAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertek Group and SPAR
The main advantage of trading using opposite Intertek Group and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertek Group position performs unexpectedly, SPAR 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 SPAR will offset losses from the drop in SPAR's long position.| Intertek Group vs. Dexterra Group | Intertek Group vs. Wildpack Beverage | Intertek Group vs. DATA Communications Management | Intertek Group vs. Mitie Group Plc |
| SPAR vs. Mitie Group Plc | SPAR vs. Dexterra Group | SPAR vs. Wildpack Beverage | SPAR vs. Intertek Group Plc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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