Correlation Between Sparta Capital and Hall Of

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

By analyzing existing cross correlation between Sparta Capital and Hall of Fame, you can compare the effects of market volatilities on Sparta Capital and Hall Of 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 Hall Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and Hall Of.

Diversification Opportunities for Sparta Capital and Hall Of

0.44

Correlation Coefficient

Sparta Capital  Hall Of

Very weak diversification

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

Pair Corralation between Sparta Capital and Hall Of

Assuming the 90 days horizon Sparta Capital is expected to generate 6.35 times less return on investment than Hall Of. But when comparing it to its historical volatility, Sparta Capital is 1.11 times less risky than Hall Of. It trades about 0.01 of its potential returns per unit of risk. Hall of Fame is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.46  in Hall of Fame on December 29, 2024 and sell it today you would lose (0.18) from holding Hall of Fame or give up 39.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.25%
Values	Daily Returns

Sparta Capital  vs.  Hall of Fame

Sparta Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sparta Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Sparta Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Hall of Fame

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hall of Fame are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hall Of showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sparta Capital and Hall Of

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

The idea behind Sparta Capital and Hall of Fame 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.