Correlation Between Sparta Capital and LifeMD Preferred
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and LifeMD Preferred 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 LifeMD Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and LifeMD Preferred Series, you can compare the effects of market volatilities on Sparta Capital and LifeMD Preferred 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 LifeMD Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and LifeMD Preferred.
Diversification Opportunities for Sparta Capital and LifeMD Preferred
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparta and LifeMD is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and LifeMD Preferred Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeMD Preferred Series 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 LifeMD Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeMD Preferred Series has no effect on the direction of Sparta Capital i.e., Sparta Capital and LifeMD Preferred go up and down completely randomly.
Pair Corralation between Sparta Capital and LifeMD Preferred
Assuming the 90 days horizon Sparta Capital is expected to generate 7.37 times more return on investment than LifeMD Preferred. However, Sparta Capital is 7.37 times more volatile than LifeMD Preferred Series. It trades about 0.04 of its potential returns per unit of risk. LifeMD Preferred Series is currently generating about 0.1 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparta Capital vs. LifeMD Preferred Series
Performance |
| Timeline |
| Sparta Capital |
| LifeMD Preferred Series |
Sparta Capital and LifeMD Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and LifeMD Preferred
The main advantage of trading using opposite Sparta Capital and LifeMD Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, LifeMD Preferred 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 LifeMD Preferred will offset losses from the drop in LifeMD Preferred'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 |
| LifeMD Preferred vs. Cadiz Depositary Shares | LifeMD Preferred vs. Star Equity Holdings | LifeMD Preferred vs. FAT Brands | LifeMD Preferred vs. Fortress Biotech Pref |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |