Correlation Between Sparta Capital and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Sparta Capital and SPDR SP 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 SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparta Capital and SPDR SP Health, you can compare the effects of market volatilities on Sparta Capital and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and SPDR SP.
Diversification Opportunities for Sparta Capital and SPDR SP
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparta and SPDR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and SPDR SP Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Health 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Health has no effect on the direction of Sparta Capital i.e., Sparta Capital and SPDR SP go up and down completely randomly.
Pair Corralation between Sparta Capital and SPDR SP
Assuming the 90 days horizon Sparta Capital is expected to under-perform the SPDR SP. In addition to that, Sparta Capital is 3.48 times more volatile than SPDR SP Health. It trades about -0.21 of its total potential returns per unit of risk. SPDR SP Health is currently generating about 0.04 per unit of volatility. If you would invest 9,346 in SPDR SP Health on August 24, 2024 and sell it today you would earn a total of 98.00 from holding SPDR SP Health or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sparta Capital vs. SPDR SP Health
Performance |
| Timeline |
| Sparta Capital |
| SPDR SP Health |
Sparta Capital and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparta Capital and SPDR SP
The main advantage of trading using opposite Sparta Capital and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparta Capital position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP'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 |
| SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Software | SPDR SP vs. SPDR SP Telecom | SPDR SP vs. SPDR SP Pharmaceuticals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |