Correlation Between Spark Networks and 36Kr Holdings

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Can any of the company-specific risk be diversified away by investing in both Spark Networks and 36Kr Holdings 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 36Kr Holdings 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 36Kr Holdings, you can compare the effects of market volatilities on Spark Networks and 36Kr Holdings 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 36Kr Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spark Networks and 36Kr Holdings.

Diversification Opportunities for Spark Networks and 36Kr Holdings

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Spark and 36Kr is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Spark Networks SE and 36Kr Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 36Kr Holdings 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 36Kr Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 36Kr Holdings has no effect on the direction of Spark Networks i.e., Spark Networks and 36Kr Holdings go up and down completely randomly.

Pair Corralation between Spark Networks and 36Kr Holdings

If you would invest  1.30  in Spark Networks SE on December 29, 2023 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 Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy4.55%
ValuesDaily Returns

Spark Networks SE  vs.  36Kr Holdings

 Performance 
       Timeline  
Spark Networks SE 

Risk-Adjusted Performance

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High
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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
36Kr Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days 36Kr Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Spark Networks and 36Kr Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Spark Networks and 36Kr Holdings

The main advantage of trading using opposite Spark Networks and 36Kr Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spark Networks position performs unexpectedly, 36Kr Holdings 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 36Kr Holdings will offset losses from the drop in 36Kr Holdings' long position.
The idea behind Spark Networks SE and 36Kr Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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