Correlation Between Thomson Reuters and SPAR

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

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

Diversification Opportunities for Thomson Reuters and SPAR

-0.06

Correlation Coefficient

Thomson Reuters  SPAR

Good diversification

The 3 months correlation between Thomson and SPAR is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thomson Reuters and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and Thomson Reuters 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 Thomson Reuters 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 Thomson Reuters i.e., Thomson Reuters and SPAR go up and down completely randomly.

Pair Corralation between Thomson Reuters and SPAR

Considering the 90-day investment horizon Thomson Reuters is expected to generate 0.4 times more return on investment than SPAR. However, Thomson Reuters is 2.47 times less risky than SPAR. It trades about 0.1 of its potential returns per unit of risk. SPAR Group is currently generating about 0.04 per unit of risk. If you would invest  18,514  in Thomson Reuters on May 5, 2025 and sell it today you would earn a total of  1,594  from holding Thomson Reuters or generate 8.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Thomson Reuters  vs.  SPAR Group

Thomson Reuters

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thomson Reuters are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Thomson Reuters may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SPAR Group

Risk-Adjusted Performance

Weak

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 Thomson Reuters and SPAR

The main advantage of trading using opposite Thomson Reuters and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thomson Reuters 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 Thomson Reuters 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.