Correlation Between Sparta Capital and IQ Merger
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and IQ Merger 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 IQ Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and IQ Merger Arbitrage, you can compare the effects of market volatilities on Sparta Capital and IQ Merger 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 IQ Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and IQ Merger.
Diversification Opportunities for Sparta Capital and IQ Merger
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparta and MNA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and IQ Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Merger Arbitrage 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 IQ Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Merger Arbitrage has no effect on the direction of Sparta Capital i.e., Sparta Capital and IQ Merger go up and down completely randomly.
Pair Corralation between Sparta Capital and IQ Merger
Assuming the 90 days horizon Sparta Capital is expected to under-perform the IQ Merger. In addition to that, Sparta Capital is 28.67 times more volatile than IQ Merger Arbitrage. It trades about -0.21 of its total potential returns per unit of risk. IQ Merger Arbitrage is currently generating about -0.04 per unit of volatility. If you would invest 3,283 in IQ Merger Arbitrage on August 29, 2024 and sell it today you would lose (5.00) from holding IQ Merger Arbitrage or give up 0.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sparta Capital vs. IQ Merger Arbitrage
Performance |
| Timeline |
| Sparta Capital |
| IQ Merger Arbitrage |
Sparta Capital and IQ Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and IQ Merger
The main advantage of trading using opposite Sparta Capital and IQ Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, IQ Merger 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 IQ Merger will offset losses from the drop in IQ Merger'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 |
| IQ Merger vs. IQ Hedge Multi Strategy | IQ Merger vs. ProShares Merger ETF | IQ Merger vs. AGFiQ Market Neutral |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |