Correlation Between Sparta Capital and Akzo Nobel
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and Akzo Nobel 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 Sparta Capital and Akzo Nobel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and Akzo Nobel NV, you can compare the effects of market volatilities on Sparta Capital and Akzo Nobel 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 Sparta Capital with a short position of Akzo Nobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and Akzo Nobel.
Diversification Opportunities for Sparta Capital and Akzo Nobel
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sparta and Akzo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and Akzo Nobel NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akzo Nobel NV and Sparta Capital 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 Sparta Capital are associated (or correlated) with Akzo Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akzo Nobel NV has no effect on the direction of Sparta Capital i.e., Sparta Capital and Akzo Nobel go up and down completely randomly.
Pair Corralation between Sparta Capital and Akzo Nobel
Assuming the 90 days horizon Sparta Capital is expected to generate 5.42 times more return on investment than Akzo Nobel. However, Sparta Capital is 5.42 times more volatile than Akzo Nobel NV. It trades about 0.04 of its potential returns per unit of risk. Akzo Nobel NV is currently generating about -0.01 per unit of risk. If you would invest 1.10 in Sparta Capital on August 30, 2024 and sell it today you would earn a total of 0.40 from holding Sparta Capital or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.28% |
| Values | Daily Returns |
Sparta Capital vs. Akzo Nobel NV
Performance |
| Timeline |
| Sparta Capital |
| Akzo Nobel NV |
Sparta Capital and Akzo Nobel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and Akzo Nobel
The main advantage of trading using opposite Sparta Capital and Akzo Nobel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, Akzo Nobel 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 Akzo Nobel will offset losses from the drop in Akzo Nobel's long position.| Sparta Capital vs. Zurn Elkay Water | Sparta Capital vs. Federal Signal | Sparta Capital vs. Energy Recovery | Sparta Capital vs. CECO Environmental Corp |
| Akzo Nobel vs. Avoca LLC | Akzo Nobel vs. AGC Inc ADR | Akzo Nobel vs. Arkema SA ADR | Akzo Nobel vs. AirBoss of America |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |