Correlation Between Grupo Sports and Novartis
Can any of the company-specific risk be diversified away by investing in both Grupo Sports and Novartis 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 Grupo Sports and Novartis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and Novartis AG, you can compare the effects of market volatilities on Grupo Sports and Novartis 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 Grupo Sports with a short position of Novartis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Novartis.
Diversification Opportunities for Grupo Sports and Novartis
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Novartis is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Novartis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novartis AG and Grupo Sports 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 Grupo Sports World are associated (or correlated) with Novartis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novartis AG has no effect on the direction of Grupo Sports i.e., Grupo Sports and Novartis go up and down completely randomly.
Pair Corralation between Grupo Sports and Novartis
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 0.52 times more return on investment than Novartis. However, Grupo Sports World is 1.91 times less risky than Novartis. It trades about 0.2 of its potential returns per unit of risk. Novartis AG is currently generating about -0.24 per unit of risk. If you would invest 620.00 in Grupo Sports World on September 20, 2024 and sell it today you would earn a total of 19.00 from holding Grupo Sports World or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Sports World vs. Novartis AG
Performance |
| Timeline |
| Grupo Sports World |
| Novartis AG |
Grupo Sports and Novartis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and Novartis
The main advantage of trading using opposite Grupo Sports and Novartis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, Novartis 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 Novartis will offset losses from the drop in Novartis' long position.| Grupo Sports vs. Grupo Profuturo SAB | Grupo Sports vs. Promotora y Operadora | Grupo Sports vs. Promotora y Operadora | Grupo Sports vs. The Select Sector |
| Novartis vs. The Bank of | Novartis vs. UnitedHealth Group Incorporated | Novartis vs. Grupo Sports World | Novartis vs. Martin Marietta Materials |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |