Correlation Between Sparq Systems and Photronics
Can any of the company-specific risk be diversified away by investing in both Sparq Systems and Photronics 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 Sparq Systems and Photronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparq Systems and Photronics, you can compare the effects of market volatilities on Sparq Systems and Photronics 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 Sparq Systems with a short position of Photronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparq Systems and Photronics.
Diversification Opportunities for Sparq Systems and Photronics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sparq and Photronics is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sparq Systems and Photronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photronics and Sparq Systems 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 Sparq Systems are associated (or correlated) with Photronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photronics has no effect on the direction of Sparq Systems i.e., Sparq Systems and Photronics go up and down completely randomly.
Pair Corralation between Sparq Systems and Photronics
Assuming the 90 days trading horizon Sparq Systems is expected to under-perform the Photronics. In addition to that, Sparq Systems is 1.4 times more volatile than Photronics. It trades about -0.05 of its total potential returns per unit of risk. Photronics is currently generating about 0.06 per unit of volatility. If you would invest 2,071 in Photronics on August 15, 2025 and sell it today you would earn a total of 174.00 from holding Photronics or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Sparq Systems vs. Photronics
Performance |
| Timeline |
| Sparq Systems |
| Photronics |
Sparq Systems and Photronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparq Systems and Photronics
The main advantage of trading using opposite Sparq Systems and Photronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparq Systems position performs unexpectedly, Photronics 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 Photronics will offset losses from the drop in Photronics' long position.| Sparq Systems vs. Algonquin Power Utilities | Sparq Systems vs. Canaf Investments | Sparq Systems vs. Kua Investments | Sparq Systems vs. Western Investment |
| Photronics vs. Himax Technologies | Photronics vs. MaxLinear | Photronics vs. Ultra Clean Holdings | Photronics vs. nLIGHT Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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