Correlation Between Sparta Capital and ClearOne
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and ClearOne 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 ClearOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and ClearOne, you can compare the effects of market volatilities on Sparta Capital and ClearOne 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 ClearOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and ClearOne.
Diversification Opportunities for Sparta Capital and ClearOne
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparta and ClearOne is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and ClearOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearOne 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 ClearOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearOne has no effect on the direction of Sparta Capital i.e., Sparta Capital and ClearOne go up and down completely randomly.
Pair Corralation between Sparta Capital and ClearOne
Assuming the 90 days horizon Sparta Capital is expected to generate 1.41 times more return on investment than ClearOne. However, Sparta Capital is 1.41 times more volatile than ClearOne. It trades about 0.04 of its potential returns per unit of risk. ClearOne is currently generating about 0.05 per unit of risk. If you would invest 1.10 in Sparta Capital on August 27, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparta Capital vs. ClearOne
Performance |
| Timeline |
| Sparta Capital |
| ClearOne |
Sparta Capital and ClearOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and ClearOne
The main advantage of trading using opposite Sparta Capital and ClearOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, ClearOne 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 ClearOne will offset losses from the drop in ClearOne'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 |
| ClearOne vs. Actelis Networks | ClearOne vs. Siyata Mobile | ClearOne vs. SatixFy Communications | ClearOne vs. Mobilicom Limited American |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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