Correlation Between Sparinvest INDEX and Conferize

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

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

Diversification Opportunities for Sparinvest INDEX and Conferize

-0.57

Correlation Coefficient

Sparinvest INDEX  Conferize

Excellent diversification

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

Pair Corralation between Sparinvest INDEX and Conferize

Assuming the 90 days trading horizon Sparinvest INDEX Globale is expected to generate 0.07 times more return on investment than Conferize. However, Sparinvest INDEX Globale is 13.51 times less risky than Conferize. It trades about 0.1 of its potential returns per unit of risk. Conferize AS is currently generating about -0.06 per unit of risk. If you would invest  14,516  in Sparinvest INDEX Globale on October 8, 2024 and sell it today you would earn a total of  546.00  from holding Sparinvest INDEX Globale or generate 3.76% return on investment over 90 days.

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

Sparinvest INDEX Globale  vs.  Conferize AS

Sparinvest INDEX Globale

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinvest INDEX Globale are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Sparinvest INDEX is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Conferize AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conferize AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sparinvest INDEX and Conferize

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

The idea behind Sparinvest INDEX Globale and Conferize AS 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.