Correlation Between Spark Networks and Dolphin Entertainment
Can any of the company-specific risk be diversified away by investing in both Spark Networks and Dolphin Entertainment 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 Spark Networks and Dolphin Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spark Networks SE and Dolphin Entertainment, you can compare the effects of market volatilities on Spark Networks and Dolphin Entertainment 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 Spark Networks with a short position of Dolphin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spark Networks and Dolphin Entertainment.
Diversification Opportunities for Spark Networks and Dolphin Entertainment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spark and Dolphin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Spark Networks SE and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment and Spark Networks 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 Spark Networks SE are associated (or correlated) with Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Spark Networks i.e., Spark Networks and Dolphin Entertainment go up and down completely randomly.
Pair Corralation between Spark Networks and Dolphin Entertainment
Considering the 90-day investment horizon Spark Networks SE is expected to under-perform the Dolphin Entertainment. In addition to that, Spark Networks is 2.84 times more volatile than Dolphin Entertainment. It trades about -0.05 of its total potential returns per unit of risk. Dolphin Entertainment is currently generating about -0.03 per unit of volatility. If you would invest 391.00 in Dolphin Entertainment on January 25, 2024 and sell it today you would lose (270.00) from holding Dolphin Entertainment or give up 69.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.53% |
| Values | Daily Returns |
Spark Networks SE vs. Dolphin Entertainment
Performance |
| Timeline |
| Spark Networks SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dolphin Entertainment |
Spark Networks and Dolphin Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spark Networks and Dolphin Entertainment
The main advantage of trading using opposite Spark Networks and Dolphin Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spark Networks position performs unexpectedly, Dolphin Entertainment 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 Dolphin Entertainment will offset losses from the drop in Dolphin Entertainment's long position.| Spark Networks vs. Locafy Limited | Spark Networks vs. Metalpha Technology Holding | Spark Networks vs. TuanChe ADR | Spark Networks vs. Thryv Holdings |
Check out your portfolio center.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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