Correlation Between Brimstone Investment and SPAR

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

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

Diversification Opportunities for Brimstone Investment and SPAR

-0.75

Correlation Coefficient

Brimstone Investment  SPAR

Pay attention - limited upside

The 3 months correlation between Brimstone and SPAR is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brimstone Investment and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and Brimstone Investment 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 Brimstone Investment 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 Brimstone Investment i.e., Brimstone Investment and SPAR go up and down completely randomly.

Pair Corralation between Brimstone Investment and SPAR

Assuming the 90 days trading horizon Brimstone Investment is expected to generate 0.13 times more return on investment than SPAR. However, Brimstone Investment is 7.53 times less risky than SPAR. It trades about -0.23 of its potential returns per unit of risk. SPAR Group is currently generating about -0.41 per unit of risk. If you would invest  50,400  in Brimstone Investment on October 25, 2024 and sell it today you would lose (300.00) from holding Brimstone Investment or give up 0.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Brimstone Investment  vs.  SPAR Group

Brimstone Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brimstone Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 Brimstone Investment and SPAR

The main advantage of trading using opposite Brimstone Investment and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimstone Investment 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 Brimstone Investment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.