Correlation Between Sparta Capital and Baylin Technologies

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

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

Diversification Opportunities for Sparta Capital and Baylin Technologies

0.0

Correlation Coefficient

Sparta Capital  Baylin Technologies

Pay attention - limited upside

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

Pair Corralation between Sparta Capital and Baylin Technologies

Assuming the 90 days horizon Sparta Capital is expected to under-perform the Baylin Technologies. In addition to that, Sparta Capital is 1.17 times more volatile than Baylin Technologies. It trades about -0.02 of its total potential returns per unit of risk. Baylin Technologies is currently generating about 0.13 per unit of volatility. If you would invest  26.00  in Baylin Technologies on September 3, 2024 and sell it today you would earn a total of  14.00  from holding Baylin Technologies or generate 53.85% return on investment over 90 days.

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

Sparta Capital  vs.  Baylin Technologies

Sparta Capital

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Sparta Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Baylin Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baylin Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Baylin Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sparta Capital and Baylin Technologies

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

The idea behind Sparta Capital and Baylin Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.