Correlation Between Sparindex INDEX and IA Invest

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

By analyzing existing cross correlation between Sparindex INDEX Bredygtige and IA Invest Advice, you can compare the effects of market volatilities on Sparindex INDEX and IA Invest 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 Sparindex INDEX with a short position of IA Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparindex INDEX and IA Invest.

Diversification Opportunities for Sparindex INDEX and IA Invest

0.0

Correlation Coefficient

Sparindex INDEX  IA Invest

Pay attention - limited upside

The 3 months correlation between Sparindex and IAIACVF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sparindex INDEX Bredygtige and IA Invest Advice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Invest Advice and Sparindex 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 Sparindex INDEX Bredygtige are associated (or correlated) with IA Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Invest Advice has no effect on the direction of Sparindex INDEX i.e., Sparindex INDEX and IA Invest go up and down completely randomly.

Pair Corralation between Sparindex INDEX and IA Invest

If you would invest  12,985  in IA Invest Advice on October 7, 2024 and sell it today you would earn a total of  1,022  from holding IA Invest Advice or generate 7.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sparindex INDEX Bredygtige  vs.  IA Invest Advice

Sparindex INDEX Bred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparindex INDEX Bredygtige has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Sparindex INDEX is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

IA Invest Advice

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IA Invest Advice are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, IA Invest may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sparindex INDEX and IA Invest

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

The idea behind Sparindex INDEX Bredygtige and IA Invest Advice 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.