Correlation Between Sparta Capital and GasLog Partners

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

By analyzing existing cross correlation between Sparta Capital and GasLog Partners LP, you can compare the effects of market volatilities on Sparta Capital and GasLog Partners 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 Sparta Capital with a short position of GasLog Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and GasLog Partners.

Diversification Opportunities for Sparta Capital and GasLog Partners

-0.44

Correlation Coefficient

Sparta Capital  GasLog Partners

Very good diversification

The 3 months correlation between Sparta and GasLog is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and GasLog Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GasLog Partners LP and Sparta Capital 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 Sparta Capital are associated (or correlated) with GasLog Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GasLog Partners LP has no effect on the direction of Sparta Capital i.e., Sparta Capital and GasLog Partners go up and down completely randomly.

Pair Corralation between Sparta Capital and GasLog Partners

Assuming the 90 days horizon Sparta Capital is expected to under-perform the GasLog Partners. In addition to that, Sparta Capital is 17.79 times more volatile than GasLog Partners LP. It trades about -0.21 of its total potential returns per unit of risk. GasLog Partners LP is currently generating about 0.16 per unit of volatility. If you would invest  2,552  in GasLog Partners LP on August 30, 2024 and sell it today you would earn a total of  27.00  from holding GasLog Partners LP or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Sparta Capital  vs.  GasLog Partners LP

Sparta Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparta Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GasLog Partners LP

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GasLog Partners LP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, GasLog Partners is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sparta Capital and GasLog Partners

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

The idea behind Sparta Capital and GasLog Partners LP 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.