Correlation Between Decisionpoint Systems and Spark Networks

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Can any of the company-specific risk be diversified away by investing in both Decisionpoint Systems 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 Decisionpoint Systems and Spark Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Decisionpoint Systems and Spark Networks, you can compare the effects of market volatilities on Decisionpoint Systems 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 Decisionpoint Systems with a short position of Spark Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Decisionpoint Systems and Spark Networks.

Diversification Opportunities for Decisionpoint Systems and Spark Networks

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Decisionpoint and Spark is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Decisionpoint Systems and Spark Networks Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Networks and Decisionpoint 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 Decisionpoint Systems 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 has no effect on the direction of Decisionpoint Systems i.e., Decisionpoint Systems and Spark Networks go up and down completely randomly.

Pair Corralation between Decisionpoint Systems and Spark Networks

Given the investment horizon of 90 days Decisionpoint Systems is expected to generate 2.52 times more return on investment than Spark Networks. However, Decisionpoint Systems is 2.52 times more volatile than Spark Networks. It trades about 0.08 of its potential returns per unit of risk. Spark Networks is currently generating about 0.01 per unit of risk. If you would invest  150.00  in Decisionpoint Systems on April 8, 2022 and sell it today you would earn a total of  284.00  from holding Decisionpoint Systems or generate 189.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Decisionpoint Systems  vs.  Spark Networks Inc

 Performance (%) 
      Timeline 
Decisionpoint Systems 
Decisionpoint Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Decisionpoint Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Decisionpoint Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
1:2
Dividend Date
2021-12-20
Last Split Date
2021-12-20

Decisionpoint Price Channel

Spark Networks 
Spark Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Spark Networks are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Spark Networks showed solid returns over the last few months and may actually be approaching a breakup point.

Spark Price Channel

Decisionpoint Systems and Spark Networks Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Decisionpoint Systems and Spark Networks

The main advantage of trading using opposite Decisionpoint Systems and Spark Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Decisionpoint Systems 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 Decisionpoint Systems and Spark Networks 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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