Correlation Between SpringBig Holdings and LifeSpeak

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

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

Diversification Opportunities for SpringBig Holdings and LifeSpeak

0.06

Correlation Coefficient

SpringBig Holdings  LifeSpeak

Significant diversification

The 3 months correlation between SpringBig and LifeSpeak is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SpringBig Holdings and LifeSpeak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifeSpeak and SpringBig Holdings 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 SpringBig Holdings are associated (or correlated) with LifeSpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifeSpeak has no effect on the direction of SpringBig Holdings i.e., SpringBig Holdings and LifeSpeak go up and down completely randomly.

Pair Corralation between SpringBig Holdings and LifeSpeak

Given the investment horizon of 90 days SpringBig Holdings is expected to under-perform the LifeSpeak. In addition to that, SpringBig Holdings is 1.28 times more volatile than LifeSpeak. It trades about -0.05 of its total potential returns per unit of risk. LifeSpeak is currently generating about 0.0 per unit of volatility. If you would invest  65.00  in LifeSpeak on October 5, 2024 and sell it today you would lose (36.00) from holding LifeSpeak or give up 55.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	23.48%
Values	Daily Returns

SpringBig Holdings  vs.  LifeSpeak

SpringBig Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

LifeSpeak

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LifeSpeak has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SpringBig Holdings and LifeSpeak

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

The idea behind SpringBig Holdings and LifeSpeak 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.