Correlation Between Sparinvest SICAV and Sparinvest Emerging

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

By analyzing existing cross correlation between Sparinvest SICAV Securus and Sparinvest Emerging, you can compare the effects of market volatilities on Sparinvest SICAV and Sparinvest Emerging 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 Sparinvest SICAV with a short position of Sparinvest Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparinvest SICAV and Sparinvest Emerging.

Diversification Opportunities for Sparinvest SICAV and Sparinvest Emerging

0.0

Correlation Coefficient

Sparinvest SICAV  Sparinvest Emerging

Pay attention - limited upside

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

Pair Corralation between Sparinvest SICAV and Sparinvest Emerging

If you would invest (100.00) in Sparinvest Emerging on September 13, 2024 and sell it today you would earn a total of  100.00  from holding Sparinvest Emerging or generate -100.0% return on investment over 90 days.

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

Sparinvest SICAV Securus  vs.  Sparinvest Emerging

Sparinvest SICAV Securus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparinvest SICAV Securus has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Sparinvest SICAV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Sparinvest Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sparinvest Emerging has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent forward indicators, Sparinvest Emerging is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sparinvest SICAV and Sparinvest Emerging

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

The idea behind Sparinvest SICAV Securus and Sparinvest Emerging 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.