Correlation Between EverQuote and Spark Networks
Can any of the company-specific risk be diversified away by investing in both EverQuote and Spark Networks 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 EverQuote and Spark Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EverQuote Class A and Spark Networks SE, you can compare the effects of market volatilities on EverQuote and Spark Networks 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 EverQuote with a short position of Spark Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of EverQuote and Spark Networks.
Diversification Opportunities for EverQuote and Spark Networks
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EverQuote and Spark is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding EverQuote Class A and Spark Networks SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Networks SE and EverQuote 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 EverQuote Class A are associated (or correlated) with Spark Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Networks SE has no effect on the direction of EverQuote i.e., EverQuote and Spark Networks go up and down completely randomly.
Pair Corralation between EverQuote and Spark Networks
Given the investment horizon of 90 days EverQuote Class A is expected to generate 0.27 times more return on investment than Spark Networks. However, EverQuote Class A is 3.64 times less risky than Spark Networks. It trades about 0.04 of its potential returns per unit of risk. Spark Networks SE is currently generating about -0.06 per unit of risk. If you would invest 1,407 in EverQuote Class A on January 25, 2024 and sell it today you would earn a total of 443.00 from holding EverQuote Class A or generate 31.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 61.59% |
| Values | Daily Returns |
EverQuote Class A vs. Spark Networks SE
Performance |
| Timeline |
| EverQuote Class A |
| Spark Networks SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EverQuote and Spark Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EverQuote and Spark Networks
The main advantage of trading using opposite EverQuote and Spark Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EverQuote position performs unexpectedly, Spark Networks 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 Spark Networks will offset losses from the drop in Spark Networks' long position.The idea behind EverQuote Class A and Spark Networks SE 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.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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