Correlation Between Sparta Capital and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and Sit Emerging 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 Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and Sit Emerging Markets, you can compare the effects of market volatilities on Sparta Capital and Sit Emerging 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 Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and Sit Emerging.
Diversification Opportunities for Sparta Capital and Sit Emerging
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparta and Sit is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets 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 Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Sparta Capital i.e., Sparta Capital and Sit Emerging go up and down completely randomly.
Pair Corralation between Sparta Capital and Sit Emerging
Assuming the 90 days horizon Sparta Capital is expected to generate 29.26 times more return on investment than Sit Emerging. However, Sparta Capital is 29.26 times more volatile than Sit Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 1.10 in Sparta Capital on August 28, 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 | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sparta Capital vs. Sit Emerging Markets
Performance |
| Timeline |
| Sparta Capital |
| Sit Emerging Markets |
Sparta Capital and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and Sit Emerging
The main advantage of trading using opposite Sparta Capital and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, Sit Emerging 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 Sit Emerging will offset losses from the drop in Sit Emerging'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 |
| Sit Emerging vs. Janus Global Technology | Sit Emerging vs. Invesco Technology Fund | Sit Emerging vs. Mfs Technology Fund | Sit Emerging vs. Blackrock Science Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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