Correlation Between Floating Rate and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both Floating Rate 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 Floating Rate and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Sparta Capital, you can compare the effects of market volatilities on Floating Rate 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 Floating Rate with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Sparta Capital.
Diversification Opportunities for Floating Rate and Sparta Capital
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Floating and Sparta is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and Floating Rate 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 Floating Rate Fund 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 Floating Rate i.e., Floating Rate and Sparta Capital go up and down completely randomly.
Pair Corralation between Floating Rate and Sparta Capital
Assuming the 90 days horizon Floating Rate Fund is expected to generate 0.08 times more return on investment than Sparta Capital. However, Floating Rate Fund is 12.8 times less risky than Sparta Capital. It trades about 0.19 of its potential returns per unit of risk. Sparta Capital is currently generating about -0.09 per unit of risk. If you would invest 786.00 in Floating Rate Fund on August 27, 2024 and sell it today you would earn a total of 32.00 from holding Floating Rate Fund or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Sparta Capital
Performance |
| Timeline |
| Floating Rate |
| Sparta Capital |
Floating Rate and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Sparta Capital
The main advantage of trading using opposite Floating Rate and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate 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.| Floating Rate vs. Lord Abbett Trust | Floating Rate vs. Lord Abbett Trust | Floating Rate vs. Lord Abbett Focused | Floating Rate vs. Floating Rate Fund |
| Sparta Capital vs. Zurn Elkay Water | Sparta Capital vs. Federal Signal | Sparta Capital vs. Energy Recovery | Sparta Capital vs. CECO Environmental Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |