Correlation Between Spotify Technology and 3I Group

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and 3I Group 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 Spotify Technology and 3I Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and 3I Group PLC, you can compare the effects of market volatilities on Spotify Technology and 3I Group 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 Spotify Technology with a short position of 3I Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and 3I Group.

Diversification Opportunities for Spotify Technology and 3I Group

SpotifyIIIDiversified AwaySpotifyIIIDiversified Away100%
0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Spotify and III is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and 3I Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3I Group PLC and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with 3I Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3I Group PLC has no effect on the direction of Spotify Technology i.e., Spotify Technology and 3I Group go up and down completely randomly.

Pair Corralation between Spotify Technology and 3I Group

Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 1.74 times more return on investment than 3I Group. However, Spotify Technology is 1.74 times more volatile than 3I Group PLC. It trades about 0.25 of its potential returns per unit of risk. 3I Group PLC is currently generating about 0.22 per unit of risk. If you would invest  35,575  in Spotify Technology SA on October 31, 2024 and sell it today you would earn a total of  15,015  from holding Spotify Technology SA or generate 42.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.39%
ValuesDaily Returns

Spotify Technology SA  vs.  3I Group PLC

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 0102030
JavaScript chart by amCharts 3.21.150SPT III
       Timeline  
Spotify Technology 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Spotify Technology SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Spotify Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan360380400420440460480500
3I Group PLC 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in 3I Group PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, 3I Group exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan3,2003,3003,4003,5003,6003,7003,8003,900

Spotify Technology and 3I Group Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.29-5.46-3.63-1.80.01.994.056.118.1710.23 0.050.100.15
JavaScript chart by amCharts 3.21.150SPT III
       Returns  

Pair Trading with Spotify Technology and 3I Group

The main advantage of trading using opposite Spotify Technology and 3I Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, 3I Group 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 3I Group will offset losses from the drop in 3I Group's long position.
The idea behind Spotify Technology SA and 3I Group PLC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Stocks Directory
Find actively traded stocks across global markets
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk


 

Trending Assets