Correlation Between Sparta Capital and Ocumetics Technology

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

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

Diversification Opportunities for Sparta Capital and Ocumetics Technology

0.01

Correlation Coefficient

Sparta Capital  Ocumetics Technology

Significant diversification

The 3 months correlation between Sparta and Ocumetics is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sparta Capital and Ocumetics Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocumetics Technology Corp 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 Ocumetics Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocumetics Technology Corp has no effect on the direction of Sparta Capital i.e., Sparta Capital and Ocumetics Technology go up and down completely randomly.

Pair Corralation between Sparta Capital and Ocumetics Technology

If you would invest  2.00  in Sparta Capital on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Sparta Capital or generate 0.0% return on investment over 90 days.

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

Sparta Capital  vs.  Ocumetics Technology Corp

Sparta Capital

Risk-Adjusted Performance

0 of 100

Very 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.

Ocumetics Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocumetics Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ocumetics Technology is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sparta Capital and Ocumetics Technology

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

The idea behind Sparta Capital and Ocumetics Technology Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.