Correlation Between SPARTA FIAGRO and BICE11

Can any of the company-specific risk be diversified away by investing in both SPARTA FIAGRO and BICE11 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 SPARTA FIAGRO and BICE11 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPARTA FIAGRO FDO and BICE11, you can compare the effects of market volatilities on SPARTA FIAGRO and BICE11 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 SPARTA FIAGRO with a short position of BICE11. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPARTA FIAGRO and BICE11.

Diversification Opportunities for SPARTA FIAGRO and BICE11

0.9

Correlation Coefficient

SPARTA FIAGRO  BICE11

Almost no diversification

The 3 months correlation between SPARTA and BICE11 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPARTA FIAGRO FDO and BICE11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICE11 and SPARTA FIAGRO 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 SPARTA FIAGRO FDO are associated (or correlated) with BICE11. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICE11 has no effect on the direction of SPARTA FIAGRO i.e., SPARTA FIAGRO and BICE11 go up and down completely randomly.

Pair Corralation between SPARTA FIAGRO and BICE11

Assuming the 90 days trading horizon SPARTA FIAGRO FDO is expected to generate 5.27 times more return on investment than BICE11. However, SPARTA FIAGRO is 5.27 times more volatile than BICE11. It trades about 0.22 of its potential returns per unit of risk. BICE11 is currently generating about 0.24 per unit of risk. If you would invest  8,861  in SPARTA FIAGRO FDO on April 20, 2025 and sell it today you would earn a total of  690.00  from holding SPARTA FIAGRO FDO or generate 7.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SPARTA FIAGRO FDO  vs.  BICE11

SPARTA FIAGRO FDO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPARTA FIAGRO FDO are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, SPARTA FIAGRO may actually be approaching a critical reversion point that can send shares even higher in August 2025.

BICE11

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BICE11 are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, BICE11 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPARTA FIAGRO and BICE11

The main advantage of trading using opposite SPARTA FIAGRO and BICE11 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPARTA FIAGRO position performs unexpectedly, BICE11 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 BICE11 will offset losses from the drop in BICE11's long position.

The idea behind SPARTA FIAGRO FDO and BICE11 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.