Correlation Between Spire Global and Shenzhen MYS

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

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

Diversification Opportunities for Spire Global and Shenzhen MYS

-0.08

Correlation Coefficient

Spire Global  Shenzhen MYS

Good diversification

The 3 months correlation between Spire and Shenzhen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ and Spire Global 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 Spire Global are associated (or correlated) with Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Spire Global i.e., Spire Global and Shenzhen MYS go up and down completely randomly.

Pair Corralation between Spire Global and Shenzhen MYS

Given the investment horizon of 90 days Spire Global is expected to generate 2.63 times more return on investment than Shenzhen MYS. However, Spire Global is 2.63 times more volatile than Shenzhen MYS Environmental. It trades about 0.05 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.02 per unit of risk. If you would invest  632.00  in Spire Global on December 2, 2024 and sell it today you would earn a total of  509.00  from holding Spire Global or generate 80.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.36%
Values	Daily Returns

Spire Global  vs.  Shenzhen MYS Environmental

Spire Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spire Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Spire Global is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Shenzhen MYS Environ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenzhen MYS Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Spire Global and Shenzhen MYS

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

The idea behind Spire Global and Shenzhen MYS Environmental 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.