Correlation Between Spark Networks and Genius Sports

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

Diversification Opportunities for Spark Networks and Genius Sports

0.75

Correlation Coefficient

Spark Networks  Genius Sports

Poor diversification

The 3 months correlation between Spark and Genius is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Spark Networks SE and Genius Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Sports 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 Genius Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Sports has no effect on the direction of Spark Networks i.e., Spark Networks and Genius Sports go up and down completely randomly.

Pair Corralation between Spark Networks and Genius Sports

If you would invest  1.30  in Spark Networks SE on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Spark Networks SE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Spark Networks SE  vs.  Genius Sports

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.

Genius Sports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genius Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Spark Networks and Genius Sports

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

The idea behind Spark Networks SE and Genius Sports 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.