Correlation Between Spark Networks and Yelp
Can any of the company-specific risk be diversified away by investing in both Spark Networks and Yelp 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 Yelp 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 Yelp Inc, you can compare the effects of market volatilities on Spark Networks and Yelp 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 Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spark Networks and Yelp.
Diversification Opportunities for Spark Networks and Yelp
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spark and Yelp is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Spark Networks SE and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc 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 Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of Spark Networks i.e., Spark Networks and Yelp go up and down completely randomly.
Pair Corralation between Spark Networks and Yelp
Considering the 90-day investment horizon Spark Networks SE is expected to under-perform the Yelp. In addition to that, Spark Networks is 5.47 times more volatile than Yelp Inc. It trades about -0.04 of its total potential returns per unit of risk. Yelp Inc is currently generating about 0.04 per unit of volatility. If you would invest 2,985 in Yelp Inc on October 13, 2024 and sell it today you would earn a total of 858.00 from holding Yelp Inc or generate 28.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 25.6% |
| Values | Daily Returns |
Spark Networks SE vs. Yelp Inc
Performance |
| Timeline |
| Spark Networks SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Yelp Inc |
Spark Networks and Yelp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spark Networks and Yelp
The main advantage of trading using opposite Spark Networks and Yelp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spark Networks position performs unexpectedly, Yelp 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 Yelp will offset losses from the drop in Yelp's long position.| Spark Networks vs. Locafy Limited | Spark Networks vs. Metalpha Technology Holding | Spark Networks vs. TuanChe ADR | Spark Networks vs. Thryv Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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