Correlation Between Fiverr International and Spark Networks

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

Diversification Opportunities for Fiverr International and Spark Networks

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Fiverr and Spark is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and Spark Networks Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Networks and Fiverr International 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 Fiverr International 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 Fiverr International i.e., Fiverr International and Spark Networks go up and down completely randomly.

Pair Corralation between Fiverr International and Spark Networks

Given the investment horizon of 90 days Fiverr International is expected to under-perform the Spark Networks. But the stock apears to be less risky and, when comparing its historical volatility, Fiverr International is 1.02 times less risky than Spark Networks. The stock trades about -0.02 of its potential returns per unit of risk. The Spark Networks is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  519.00  in Spark Networks on March 31, 2022 and sell it today you would lose (208.00)  from holding Spark Networks or give up 40.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fiverr International  vs.  Spark Networks Inc

 Performance (%) 
      Timeline 
Fiverr International 
Fiverr Performance
0 of 100
Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in July 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Fiverr Price Channel

Spark Networks 
Spark Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Spark Networks are ranked lower than 5 (%) 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

Fiverr International and Spark Networks Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Fiverr International and Spark Networks

The main advantage of trading using opposite Fiverr International and Spark Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International 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 Fiverr International 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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