Correlation Between Spire Global and Global Unichip

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

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

Diversification Opportunities for Spire Global and Global Unichip

0.23

Correlation Coefficient

Spire Global  Global Unichip

Modest diversification

The 3 months correlation between Spire and Global is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Global Unichip Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Unichip Corp 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 Global Unichip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Unichip Corp has no effect on the direction of Spire Global i.e., Spire Global and Global Unichip go up and down completely randomly.

Pair Corralation between Spire Global and Global Unichip

Given the investment horizon of 90 days Spire Global is expected to under-perform the Global Unichip. In addition to that, Spire Global is 2.86 times more volatile than Global Unichip Corp. It trades about -0.05 of its total potential returns per unit of risk. Global Unichip Corp is currently generating about -0.07 per unit of volatility. If you would invest  132,500  in Global Unichip Corp on December 29, 2024 and sell it today you would lose (17,000) from holding Global Unichip Corp or give up 12.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

Spire Global  vs.  Global Unichip Corp

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.

Global Unichip Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Unichip Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Spire Global and Global Unichip

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

The idea behind Spire Global and Global Unichip Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.