Correlation Between SPENN Technology and Mentor Capital

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

By analyzing existing cross correlation between SPENN Technology AS and Mentor Capital, you can compare the effects of market volatilities on SPENN Technology and Mentor Capital 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 SPENN Technology with a short position of Mentor Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPENN Technology and Mentor Capital.

Diversification Opportunities for SPENN Technology and Mentor Capital

0.0

Correlation Coefficient

SPENN Technology  Mentor Capital

Pay attention - limited upside

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

Pair Corralation between SPENN Technology and Mentor Capital

If you would invest  7.00  in Mentor Capital on September 12, 2024 and sell it today you would lose (1.32) from holding Mentor Capital or give up 18.86% of portfolio value over 90 days.

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

SPENN Technology AS  vs.  Mentor Capital

SPENN Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mentor Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mentor Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Mentor Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPENN Technology and Mentor Capital

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

The idea behind SPENN Technology AS and Mentor Capital 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 Stocks Directory module to find actively traded stocks across global markets.