Correlation Between Sparinvest INDEX and Sparinvest Europa
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By analyzing existing cross correlation between Sparinvest INDEX Europa and Sparinvest Europa Growth, you can compare the effects of market volatilities on Sparinvest INDEX and Sparinvest Europa 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 Sparinvest INDEX with a short position of Sparinvest Europa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparinvest INDEX and Sparinvest Europa.
Diversification Opportunities for Sparinvest INDEX and Sparinvest Europa
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparinvest and Sparinvest is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sparinvest INDEX Europa and Sparinvest Europa Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Europa Growth and Sparinvest INDEX 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 Sparinvest INDEX Europa are associated (or correlated) with Sparinvest Europa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Europa Growth has no effect on the direction of Sparinvest INDEX i.e., Sparinvest INDEX and Sparinvest Europa go up and down completely randomly.
Pair Corralation between Sparinvest INDEX and Sparinvest Europa
Assuming the 90 days trading horizon Sparinvest INDEX is expected to generate 1.0 times less return on investment than Sparinvest Europa. But when comparing it to its historical volatility, Sparinvest INDEX Europa is 1.1 times less risky than Sparinvest Europa. It trades about 0.06 of its potential returns per unit of risk. Sparinvest Europa Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,135 in Sparinvest Europa Growth on August 29, 2024 and sell it today you would earn a total of 1,715 from holding Sparinvest Europa Growth or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparinvest INDEX Europa vs. Sparinvest Europa Growth
Performance |
| Timeline |
| Sparinvest INDEX Europa |
| Sparinvest Europa Growth |
Sparinvest INDEX and Sparinvest Europa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparinvest INDEX and Sparinvest Europa
The main advantage of trading using opposite Sparinvest INDEX and Sparinvest Europa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparinvest INDEX position performs unexpectedly, Sparinvest Europa 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 Sparinvest Europa will offset losses from the drop in Sparinvest Europa's long position.| Sparinvest INDEX vs. Jyske Invest Nye | Sparinvest INDEX vs. Jyske Invest Korte | Sparinvest INDEX vs. Jyske Invest Nye | Sparinvest INDEX vs. Jyske Invest Virksomhedsobligationer |
| Sparinvest Europa vs. Jyske Invest Nye | Sparinvest Europa vs. Jyske Invest Korte | Sparinvest Europa vs. Jyske Invest Nye | Sparinvest Europa vs. Jyske Invest Virksomhedsobligationer |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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