Correlation Between Sparta Capital and New York
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and New York Mortgage, you can compare the effects of market volatilities on Sparta Capital and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and New York.
Diversification Opportunities for Sparta Capital and New York
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sparta and New is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Sparta Capital i.e., Sparta Capital and New York go up and down completely randomly.
Pair Corralation between Sparta Capital and New York
Assuming the 90 days horizon Sparta Capital is expected to generate 24.67 times more return on investment than New York. However, Sparta Capital is 24.67 times more volatile than New York Mortgage. It trades about 0.04 of its potential returns per unit of risk. New York Mortgage is currently generating about 0.16 per unit of risk. If you would invest 1.21 in Sparta Capital on August 27, 2024 and sell it today you would earn a total of 0.29 from holding Sparta Capital or generate 23.97% 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. New York Mortgage
Performance |
| Timeline |
| Sparta Capital |
| New York Mortgage |
Sparta Capital and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and New York
The main advantage of trading using opposite Sparta Capital and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Sparta Capital vs. Copa Holdings SA | Sparta Capital vs. United Airlines Holdings | Sparta Capital vs. Delta Air Lines | Sparta Capital vs. SkyWest |
| New York vs. New York Mortgage | New York vs. AGNC Investment Corp | New York vs. Chimera Investment | New York vs. AGNC Investment Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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