Correlation Between Coreshares Index and SPAR

Can any of the company-specific risk be diversified away by investing in both Coreshares Index and SPAR 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 Coreshares Index and SPAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coreshares Index Tracker and SPAR Group, you can compare the effects of market volatilities on Coreshares Index and SPAR 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 Coreshares Index with a short position of SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coreshares Index and SPAR.

Diversification Opportunities for Coreshares Index and SPAR

-0.14

Correlation Coefficient

Coreshares Index  SPAR

Good diversification

The 3 months correlation between Coreshares and SPAR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and Coreshares 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 Coreshares Index Tracker are associated (or correlated) with SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of Coreshares Index i.e., Coreshares Index and SPAR go up and down completely randomly.

Pair Corralation between Coreshares Index and SPAR

Assuming the 90 days trading horizon Coreshares Index is expected to generate 1.08 times less return on investment than SPAR. But when comparing it to its historical volatility, Coreshares Index Tracker is 2.13 times less risky than SPAR. It trades about 0.04 of its potential returns per unit of risk. SPAR Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,320,000  in SPAR Group on October 11, 2024 and sell it today you would earn a total of  147,800  from holding SPAR Group or generate 11.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.47%
Values	Daily Returns

Coreshares Index Tracker  vs.  SPAR Group

Coreshares Index Tracker

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Coreshares Index is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SPAR Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPAR Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, SPAR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Coreshares Index and SPAR

The main advantage of trading using opposite Coreshares Index and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coreshares Index position performs unexpectedly, SPAR 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 SPAR will offset losses from the drop in SPAR's long position.

The idea behind Coreshares Index Tracker and SPAR Group 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.