Correlation Between Sprout Social and Smartsheet
Can any of the company-specific risk be diversified away by investing in both Sprout Social and Smartsheet 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 Sprout Social and Smartsheet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprout Social and Smartsheet, you can compare the effects of market volatilities on Sprout Social and Smartsheet 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 Sprout Social with a short position of Smartsheet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprout Social and Smartsheet.
Diversification Opportunities for Sprout Social and Smartsheet
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sprout and Smartsheet is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sprout Social and Smartsheet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartsheet and Sprout Social 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 Sprout Social are associated (or correlated) with Smartsheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartsheet has no effect on the direction of Sprout Social i.e., Sprout Social and Smartsheet go up and down completely randomly.
Pair Corralation between Sprout Social and Smartsheet
Considering the 90-day investment horizon Sprout Social is expected to generate 18.19 times more return on investment than Smartsheet. However, Sprout Social is 18.19 times more volatile than Smartsheet. It trades about 0.17 of its potential returns per unit of risk. Smartsheet is currently generating about -0.13 per unit of risk. If you would invest 2,744 in Sprout Social on August 30, 2024 and sell it today you would earn a total of 425.00 from holding Sprout Social or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprout Social vs. Smartsheet
Performance |
| Timeline |
| Sprout Social |
| Smartsheet |
Sprout Social and Smartsheet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprout Social and Smartsheet
The main advantage of trading using opposite Sprout Social and Smartsheet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprout Social position performs unexpectedly, Smartsheet 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 Smartsheet will offset losses from the drop in Smartsheet's long position.| Sprout Social vs. Zoom Video Communications | Sprout Social vs. C3 Ai Inc | Sprout Social vs. Shopify | Sprout Social vs. Workday |
| Smartsheet vs. Datadog | Smartsheet vs. MondayCom | Smartsheet vs. HubSpot | Smartsheet vs. Cadence Design Systems |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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