Correlation Between Spark Networks and DecisionPoint Systems

Can any of the company-specific risk be diversified away by investing in both Spark Networks and DecisionPoint Systems 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 DecisionPoint Systems 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 DecisionPoint Systems, you can compare the effects of market volatilities on Spark Networks and DecisionPoint Systems 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 DecisionPoint Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spark Networks and DecisionPoint Systems.

Diversification Opportunities for Spark Networks and DecisionPoint Systems

-0.68

Correlation Coefficient

Spark Networks  DecisionPoint Systems

Excellent diversification

The 3 months correlation between Spark and DecisionPoint is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Spark Networks SE and DecisionPoint Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecisionPoint Systems 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 DecisionPoint Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecisionPoint Systems has no effect on the direction of Spark Networks i.e., Spark Networks and DecisionPoint Systems go up and down completely randomly.

Pair Corralation between Spark Networks and DecisionPoint Systems

If you would invest  814.00  in DecisionPoint Systems on January 24, 2024 and sell it today you would earn a total of  21.00  from holding DecisionPoint Systems or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.44%
Values	Daily Returns

Spark Networks SE  vs.  DecisionPoint Systems

Spark Networks SE

Risk-Adjusted Performance

0 of 100

Very Weak

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

DecisionPoint Systems

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DecisionPoint Systems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, DecisionPoint Systems demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spark Networks and DecisionPoint Systems

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

The idea behind Spark Networks SE and DecisionPoint Systems 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.