Correlation Between Momentive Global and Sprout Social
Can any of the company-specific risk be diversified away by investing in both Momentive Global and Sprout 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 Momentive Global and Sprout Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentive Global and Sprout Social, you can compare the effects of market volatilities on Momentive Global and Sprout 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 Momentive Global with a short position of Sprout Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentive Global and Sprout Social.
Diversification Opportunities for Momentive Global and Sprout Social
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Momentive and Sprout is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Momentive Global and Sprout Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprout Social and Momentive Global 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 Momentive Global are associated (or correlated) with Sprout Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprout Social has no effect on the direction of Momentive Global i.e., Momentive Global and Sprout Social go up and down completely randomly.
Pair Corralation between Momentive Global and Sprout Social
Given the investment horizon of 90 days Momentive Global is expected to generate 0.77 times more return on investment than Sprout Social. However, Momentive Global is 1.31 times less risky than Sprout Social. It trades about 0.08 of its potential returns per unit of risk. Sprout Social is currently generating about -0.01 per unit of risk. If you would invest 744.00 in Momentive Global on August 24, 2024 and sell it today you would earn a total of 201.00 from holding Momentive Global or generate 27.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 26.21% |
| Values | Daily Returns |
Momentive Global vs. Sprout Social
Performance |
| Timeline |
| Momentive Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sprout Social |
Momentive Global and Sprout Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Momentive Global and Sprout Social
The main advantage of trading using opposite Momentive Global and Sprout Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentive Global position performs unexpectedly, Sprout 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 Sprout Social will offset losses from the drop in Sprout Social's long position.| Momentive Global vs. PROS Holdings | Momentive Global vs. Meridianlink | Momentive Global vs. Enfusion | Momentive Global vs. Clearwater Analytics Holdings |
| Sprout Social vs. Progyny | Sprout Social vs. Endava | Sprout Social vs. Goosehead Insurance | Sprout Social vs. Sitime |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |