Correlation Between Spire Global and Genie Music

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

By analyzing existing cross correlation between Spire Global and Genie Music, you can compare the effects of market volatilities on Spire Global and Genie Music 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 Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Genie Music.

Diversification Opportunities for Spire Global and Genie Music

0.2

Correlation Coefficient

Spire Global  Genie Music

Modest diversification

The 3 months correlation between Spire and Genie is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music 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 Genie Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genie Music has no effect on the direction of Spire Global i.e., Spire Global and Genie Music go up and down completely randomly.

Pair Corralation between Spire Global and Genie Music

Given the investment horizon of 90 days Spire Global is expected to under-perform the Genie Music. In addition to that, Spire Global is 4.75 times more volatile than Genie Music. It trades about -0.05 of its total potential returns per unit of risk. Genie Music is currently generating about -0.1 per unit of volatility. If you would invest  209,500  in Genie Music on December 29, 2024 and sell it today you would lose (22,700) from holding Genie Music or give up 10.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Spire Global  vs.  Genie Music

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 unfluctuating performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Genie Music

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genie Music has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Spire Global and Genie Music

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

The idea behind Spire Global and Genie Music 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .