Correlation Between Sparx Technology and Queens Road

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

By analyzing existing cross correlation between Sparx Technology and Queens Road Capital, you can compare the effects of market volatilities on Sparx Technology and Queens Road 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 Sparx Technology with a short position of Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparx Technology and Queens Road.

Diversification Opportunities for Sparx Technology and Queens Road

0.8

Correlation Coefficient

Sparx Technology  Queens Road

Very poor diversification

The 3 months correlation between Sparx and Queens is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sparx Technology and Queens Road Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Capital and Sparx Technology 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 Sparx Technology are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Capital has no effect on the direction of Sparx Technology i.e., Sparx Technology and Queens Road go up and down completely randomly.

Pair Corralation between Sparx Technology and Queens Road

Assuming the 90 days trading horizon Sparx Technology is expected to generate 0.99 times more return on investment than Queens Road. However, Sparx Technology is 1.01 times less risky than Queens Road. It trades about 0.43 of its potential returns per unit of risk. Queens Road Capital is currently generating about 0.16 per unit of risk. If you would invest  1,826  in Sparx Technology on April 20, 2025 and sell it today you would earn a total of  1,265  from holding Sparx Technology or generate 69.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Sparx Technology  vs.  Queens Road Capital

Sparx Technology

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sparx Technology are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sparx Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Queens Road Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Queens Road Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Queens Road displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sparx Technology and Queens Road

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

The idea behind Sparx Technology and Queens Road Capital 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.