Correlation Between Sparta Capital and Sentage Holdings
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and Sentage Holdings 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 Sentage Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and Sentage Holdings, you can compare the effects of market volatilities on Sparta Capital and Sentage Holdings 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 Sentage Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and Sentage Holdings.
Diversification Opportunities for Sparta Capital and Sentage Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparta and Sentage is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and Sentage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentage Holdings 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 Sentage Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentage Holdings has no effect on the direction of Sparta Capital i.e., Sparta Capital and Sentage Holdings go up and down completely randomly.
Pair Corralation between Sparta Capital and Sentage Holdings
Assuming the 90 days horizon Sparta Capital is expected to generate 1.0 times more return on investment than Sentage Holdings. However, Sparta Capital is 1.0 times more volatile than Sentage Holdings. It trades about 0.05 of its potential returns per unit of risk. Sentage Holdings is currently generating about 0.04 per unit of risk. If you would invest 0.66 in Sparta Capital on August 24, 2024 and sell it today you would earn a total of 0.84 from holding Sparta Capital or generate 127.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparta Capital vs. Sentage Holdings
Performance |
| Timeline |
| Sparta Capital |
| Sentage Holdings |
Sparta Capital and Sentage Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and Sentage Holdings
The main advantage of trading using opposite Sparta Capital and Sentage Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, Sentage Holdings 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 Sentage Holdings will offset losses from the drop in Sentage Holdings' long position.| Sparta Capital vs. Zurn Elkay Water | Sparta Capital vs. Federal Signal | Sparta Capital vs. Energy Recovery | Sparta Capital vs. CECO Environmental Corp |
| Sentage Holdings vs. Yirendai | Sentage Holdings vs. Lexinfintech Holdings | Sentage Holdings vs. Lufax Holding | Sentage Holdings vs. X Financial Class |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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