Correlation Between Sparx Technology and Apple
Can any of the company-specific risk be diversified away by investing in both Sparx Technology and Apple 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 Sparx Technology and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparx Technology and Apple Inc CDR, you can compare the effects of market volatilities on Sparx Technology and Apple 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 Sparx Technology with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparx Technology and Apple.
Diversification Opportunities for Sparx Technology and Apple
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sparx and Apple is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sparx Technology and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Sparx Technology 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 Sparx Technology are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Sparx Technology i.e., Sparx Technology and Apple go up and down completely randomly.
Pair Corralation between Sparx Technology and Apple
Assuming the 90 days trading horizon Sparx Technology is expected to generate 2.38 times more return on investment than Apple. However, Sparx Technology is 2.38 times more volatile than Apple Inc CDR. It trades about 0.23 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.33 per unit of risk. If you would invest 2,369 in Sparx Technology on September 2, 2024 and sell it today you would earn a total of 223.00 from holding Sparx Technology or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Sparx Technology vs. Apple Inc CDR
Performance |
| Timeline |
| Sparx Technology |
| Apple Inc CDR |
Sparx Technology and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparx Technology and Apple
The main advantage of trading using opposite Sparx Technology and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparx Technology position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Sparx Technology vs. VerticalScope Holdings | Sparx Technology vs. WildBrain | Sparx Technology vs. iShares Canadian HYBrid | Sparx Technology vs. Altagas Cum Red |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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