Correlation Between Sprout Social and Infobird

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

By analyzing existing cross correlation between Sprout Social and Infobird Co, you can compare the effects of market volatilities on Sprout Social and Infobird 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 Sprout Social with a short position of Infobird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprout Social and Infobird.

Diversification Opportunities for Sprout Social and Infobird

0.15

Correlation Coefficient

Sprout Social  Infobird

Average diversification

The 3 months correlation between Sprout and Infobird is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sprout Social and Infobird Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infobird and Sprout Social 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 Sprout Social are associated (or correlated) with Infobird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infobird has no effect on the direction of Sprout Social i.e., Sprout Social and Infobird go up and down completely randomly.

Pair Corralation between Sprout Social and Infobird

Considering the 90-day investment horizon Sprout Social is expected to generate 0.45 times more return on investment than Infobird. However, Sprout Social is 2.21 times less risky than Infobird. It trades about -0.1 of its potential returns per unit of risk. Infobird Co is currently generating about -0.14 per unit of risk. If you would invest  3,202  in Sprout Social on November 28, 2024 and sell it today you would lose (477.00) from holding Sprout Social or give up 14.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sprout Social  vs.  Infobird Co

Sprout Social

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sprout Social has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Infobird

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infobird Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Sprout Social and Infobird

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

The idea behind Sprout Social and Infobird Co 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.