Correlation Between SPARTA FIAGRO and Hectare Student

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

Diversification Opportunities for SPARTA FIAGRO and Hectare Student

0.73

Correlation Coefficient

SPARTA FIAGRO  Hectare Student

Poor diversification

The 3 months correlation between SPARTA and Hectare is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPARTA FIAGRO FDO and Hectare Student Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hectare Student Housing 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 Hectare Student. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hectare Student Housing has no effect on the direction of SPARTA FIAGRO i.e., SPARTA FIAGRO and Hectare Student go up and down completely randomly.

Pair Corralation between SPARTA FIAGRO and Hectare Student

Assuming the 90 days trading horizon SPARTA FIAGRO is expected to generate 6.26 times less return on investment than Hectare Student. But when comparing it to its historical volatility, SPARTA FIAGRO FDO is 10.64 times less risky than Hectare Student. It trades about 0.22 of its potential returns per unit of risk. Hectare Student Housing is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,944  in Hectare Student Housing on April 24, 2025 and sell it today you would earn a total of  2,106  from holding Hectare Student Housing or generate 42.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

SPARTA FIAGRO FDO  vs.  Hectare Student Housing

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.

Hectare Student Housing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hectare Student Housing are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Hectare Student sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPARTA FIAGRO and Hectare Student

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

The idea behind SPARTA FIAGRO FDO and Hectare Student Housing 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.