Correlation Between C WorldWide and Sparinv SICAV

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

By analyzing existing cross correlation between C WorldWide Globale and Sparinv SICAV, you can compare the effects of market volatilities on C WorldWide and Sparinv SICAV 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 C WorldWide with a short position of Sparinv SICAV. Check out your portfolio center. Please also check ongoing floating volatility patterns of C WorldWide and Sparinv SICAV.

Diversification Opportunities for C WorldWide and Sparinv SICAV

0.92

Correlation Coefficient

C WorldWide  Sparinv SICAV

Almost no diversification

The 3 months correlation between CWIGAKLA and Sparinv is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding C WorldWide Globale and Sparinv SICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinv SICAV and C WorldWide 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 C WorldWide Globale are associated (or correlated) with Sparinv SICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinv SICAV has no effect on the direction of C WorldWide i.e., C WorldWide and Sparinv SICAV go up and down completely randomly.

Pair Corralation between C WorldWide and Sparinv SICAV

Assuming the 90 days trading horizon C WorldWide is expected to generate 1.41 times less return on investment than Sparinv SICAV. But when comparing it to its historical volatility, C WorldWide Globale is 1.05 times less risky than Sparinv SICAV. It trades about 0.17 of its potential returns per unit of risk. Sparinv SICAV is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  26,930  in Sparinv SICAV on September 5, 2024 and sell it today you would earn a total of  3,020  from holding Sparinv SICAV or generate 11.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

C WorldWide Globale  vs.  Sparinv SICAV

C WorldWide Globale

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in C WorldWide Globale are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite quite unfluctuating basic indicators, C WorldWide may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sparinv SICAV

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinv SICAV are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Sparinv SICAV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with C WorldWide and Sparinv SICAV

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

The idea behind C WorldWide Globale and Sparinv SICAV 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..