Correlation Between Zillow Group and SPAR

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Can any of the company-specific risk be diversified away by investing in both Zillow Group and SPAR 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 Zillow Group and SPAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and SPAR Group, you can compare the effects of market volatilities on Zillow Group and SPAR 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 Zillow Group with a short position of SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and SPAR.

Diversification Opportunities for Zillow Group and SPAR

ZillowSPARDiversified AwayZillowSPARDiversified Away100%
-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Zillow and SPAR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and Zillow Group 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 Zillow Group Class are associated (or correlated) with SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of Zillow Group i.e., Zillow Group and SPAR go up and down completely randomly.

Pair Corralation between Zillow Group and SPAR

Taking into account the 90-day investment horizon Zillow Group Class is expected to generate 1.24 times more return on investment than SPAR. However, Zillow Group is 1.24 times more volatile than SPAR Group. It trades about 0.12 of its potential returns per unit of risk. SPAR Group is currently generating about -0.1 per unit of risk. If you would invest  6,259  in Zillow Group Class on September 14, 2024 and sell it today you would earn a total of  1,732  from holding Zillow Group Class or generate 27.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Zillow Group Class  vs.  SPAR Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -1001020304050
JavaScript chart by amCharts 3.21.15Z SGRP
       Timeline  
Zillow Group Class 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group Class are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Zillow Group showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec606570758085
SPAR Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SPAR Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.71.81.922.12.22.32.4

Zillow Group and SPAR Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.19-8.38-5.57-2.760.03.056.19.1612.21 0.010.020.030.04
JavaScript chart by amCharts 3.21.15Z SGRP
       Returns  

Pair Trading with Zillow Group and SPAR

The main advantage of trading using opposite Zillow Group and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group position performs unexpectedly, SPAR 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 SPAR will offset losses from the drop in SPAR's long position.
The idea behind Zillow Group Class and SPAR Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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