Correlation Between Spark Power and Clean Vision
Can any of the company-specific risk be diversified away by investing in both Spark Power and Clean Vision 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 Spark Power and Clean Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spark Power Group and Clean Vision Corp, you can compare the effects of market volatilities on Spark Power and Clean Vision 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 Spark Power with a short position of Clean Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spark Power and Clean Vision.
Diversification Opportunities for Spark Power and Clean Vision
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spark and Clean is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Spark Power Group and Clean Vision Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Vision Corp and Spark Power 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 Spark Power Group are associated (or correlated) with Clean Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Vision Corp has no effect on the direction of Spark Power i.e., Spark Power and Clean Vision go up and down completely randomly.
Pair Corralation between Spark Power and Clean Vision
Assuming the 90 days horizon Spark Power Group is expected to generate 14.13 times more return on investment than Clean Vision. However, Spark Power is 14.13 times more volatile than Clean Vision Corp. It trades about 0.12 of its potential returns per unit of risk. Clean Vision Corp is currently generating about 0.02 per unit of risk. If you would invest 2.00 in Spark Power Group on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Spark Power Group or generate 1250.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.52% |
| Values | Daily Returns |
Spark Power Group vs. Clean Vision Corp
Performance |
| Timeline |
| Spark Power Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Clean Vision Corp |
Spark Power and Clean Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spark Power and Clean Vision
The main advantage of trading using opposite Spark Power and Clean Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spark Power position performs unexpectedly, Clean Vision 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 Clean Vision will offset losses from the drop in Clean Vision's long position.The idea behind Spark Power Group and Clean Vision Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Clean Vision vs. Altius Renewable Royalties | Clean Vision vs. Alternus Energy Group | Clean Vision vs. Triad Pro Innovators | Clean Vision vs. American Security Resources |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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