Correlation Between SPAR and K-Bro Linen
Can any of the company-specific risk be diversified away by investing in both SPAR and K-Bro Linen 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 SPAR and K-Bro Linen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPAR Group and K Bro Linen, you can compare the effects of market volatilities on SPAR and K-Bro Linen 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 SPAR with a short position of K-Bro Linen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPAR and K-Bro Linen.
Diversification Opportunities for SPAR and K-Bro Linen
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPAR and K-Bro is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SPAR Group and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen and SPAR 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 SPAR Group are associated (or correlated) with K-Bro Linen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of SPAR i.e., SPAR and K-Bro Linen go up and down completely randomly.
Pair Corralation between SPAR and K-Bro Linen
If you would invest 2,625 in K Bro Linen on August 30, 2024 and sell it today you would earn a total of 0.00 from holding K Bro Linen or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
SPAR Group vs. K Bro Linen
Performance |
| Timeline |
| SPAR Group |
| K Bro Linen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPAR and K-Bro Linen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPAR and K-Bro Linen
The main advantage of trading using opposite SPAR and K-Bro Linen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPAR position performs unexpectedly, K-Bro Linen 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 K-Bro Linen will offset losses from the drop in K-Bro Linen's long position.| SPAR vs. Mitie Group Plc | SPAR vs. Dexterra Group | SPAR vs. Wildpack Beverage | SPAR vs. Intertek Group Plc |
| K-Bro Linen vs. Wilhelmina | K-Bro Linen vs. Brambles Ltd ADR | K-Bro Linen vs. Rentokil Initial PLC | K-Bro Linen vs. Team Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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