Correlation Between Sparta Capital and GLENLN

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

By analyzing existing cross correlation between Sparta Capital and GLENLN 4 16 APR 25, you can compare the effects of market volatilities on Sparta Capital and GLENLN 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 GLENLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparta Capital and GLENLN.

Diversification Opportunities for Sparta Capital and GLENLN

-0.57

Correlation Coefficient

Sparta Capital  GLENLN

Excellent diversification

The 3 months correlation between Sparta and GLENLN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and GLENLN 4 16 APR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLENLN 4 16 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 GLENLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLENLN 4 16 has no effect on the direction of Sparta Capital i.e., Sparta Capital and GLENLN go up and down completely randomly.

Pair Corralation between Sparta Capital and GLENLN

Assuming the 90 days horizon Sparta Capital is expected to under-perform the GLENLN. In addition to that, Sparta Capital is 36.55 times more volatile than GLENLN 4 16 APR 25. It trades about -0.21 of its total potential returns per unit of risk. GLENLN 4 16 APR 25 is currently generating about 0.03 per unit of volatility. If you would invest  9,945  in GLENLN 4 16 APR 25 on August 31, 2024 and sell it today you would earn a total of  4.00  from holding GLENLN 4 16 APR 25 or generate 0.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	45.45%
Values	Daily Returns

Sparta Capital  vs.  GLENLN 4 16 APR 25

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.

GLENLN 4 16

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GLENLN 4 16 APR 25 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GLENLN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sparta Capital and GLENLN

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

The idea behind Sparta Capital and GLENLN 4 16 APR 25 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.