Correlation Between Spark Networks and Grom Social
Can any of the company-specific risk be diversified away by investing in both Spark Networks and Grom Social 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 Spark Networks and Grom Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spark Networks SE and Grom Social Enterprises, you can compare the effects of market volatilities on Spark Networks and Grom Social 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 Spark Networks with a short position of Grom Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spark Networks and Grom Social.
Diversification Opportunities for Spark Networks and Grom Social
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spark and Grom is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Spark Networks SE and Grom Social Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grom Social Enterprises and Spark Networks 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 Spark Networks SE are associated (or correlated) with Grom Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grom Social Enterprises has no effect on the direction of Spark Networks i.e., Spark Networks and Grom Social go up and down completely randomly.
Pair Corralation between Spark Networks and Grom Social
Considering the 90-day investment horizon Spark Networks SE is expected to under-perform the Grom Social. In addition to that, Spark Networks is 1.16 times more volatile than Grom Social Enterprises. It trades about -0.27 of its total potential returns per unit of risk. Grom Social Enterprises is currently generating about -0.13 per unit of volatility. If you would invest 640.00 in Grom Social Enterprises on August 28, 2024 and sell it today you would lose (635.40) from holding Grom Social Enterprises or give up 99.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.21% |
| Values | Daily Returns |
Spark Networks SE vs. Grom Social Enterprises
Performance |
| Timeline |
| Spark Networks SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Grom Social Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Spark Networks and Grom Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spark Networks and Grom Social
The main advantage of trading using opposite Spark Networks and Grom Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spark Networks position performs unexpectedly, Grom Social 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 Grom Social will offset losses from the drop in Grom Social's long position.| Spark Networks vs. Locafy Limited | Spark Networks vs. Metalpha Technology Holding | Spark Networks vs. TuanChe ADR | Spark Networks vs. Thryv Holdings |
| Grom Social vs. Digital Brands Group | Grom Social vs. Paltalk | Grom Social vs. DatChat | Grom Social vs. Ensysce Biosciences |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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