Correlation Between Sylvania Platinum and Spanish Broadcasting

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

By analyzing existing cross correlation between Sylvania Platinum Limited and Spanish Broadcasting System, you can compare the effects of market volatilities on Sylvania Platinum and Spanish Broadcasting 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 Sylvania Platinum with a short position of Spanish Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sylvania Platinum and Spanish Broadcasting.

Diversification Opportunities for Sylvania Platinum and Spanish Broadcasting

-0.41

Correlation Coefficient

Sylvania Platinum  Spanish Broadcasting

Very good diversification

The 3 months correlation between Sylvania and Spanish is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sylvania Platinum Limited and Spanish Broadcasting System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Broadcasting and Sylvania Platinum 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 Sylvania Platinum Limited are associated (or correlated) with Spanish Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Broadcasting has no effect on the direction of Sylvania Platinum i.e., Sylvania Platinum and Spanish Broadcasting go up and down completely randomly.

Pair Corralation between Sylvania Platinum and Spanish Broadcasting

Assuming the 90 days horizon Sylvania Platinum Limited is expected to generate 0.52 times more return on investment than Spanish Broadcasting. However, Sylvania Platinum Limited is 1.92 times less risky than Spanish Broadcasting. It trades about -0.01 of its potential returns per unit of risk. Spanish Broadcasting System is currently generating about -0.02 per unit of risk. If you would invest  120.00  in Sylvania Platinum Limited on October 7, 2024 and sell it today you would lose (67.00) from holding Sylvania Platinum Limited or give up 55.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.86%
Values	Daily Returns

Sylvania Platinum Limited  vs.  Spanish Broadcasting System

Sylvania Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sylvania Platinum Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Spanish Broadcasting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spanish Broadcasting System has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Spanish Broadcasting is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sylvania Platinum and Spanish Broadcasting

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

The idea behind Sylvania Platinum Limited and Spanish Broadcasting System 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.