Correlation Between K Bro and SPAR

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

By analyzing existing cross correlation between K Bro Linen and SPAR Group, you can compare the effects of market volatilities on K Bro and SPAR 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 K Bro with a short position of SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Bro and SPAR.

Diversification Opportunities for K Bro and SPAR

-0.4

Correlation Coefficient

K Bro  SPAR

Very good diversification

The 3 months correlation between KBRLF and SPAR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and K Bro 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 K Bro Linen are associated (or correlated) with SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of K Bro i.e., K Bro and SPAR go up and down completely randomly.

Pair Corralation between K Bro and SPAR

Assuming the 90 days horizon K Bro Linen is expected to under-perform the SPAR. But the pink sheet apears to be less risky and, when comparing its historical volatility, K Bro Linen is 5.32 times less risky than SPAR. The pink sheet trades about -0.05 of its potential returns per unit of risk. The SPAR Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  105.00  in SPAR Group on May 6, 2025 and sell it today you would earn a total of  5.00  from holding SPAR Group or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.49%
Values	Daily Returns

K Bro Linen  vs.  SPAR Group

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SPAR Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPAR Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, SPAR may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with K Bro and SPAR

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

The idea behind K Bro Linen and SPAR Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.