Correlation Between Spire Global and Catalyst Enhanced

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

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

Diversification Opportunities for Spire Global and Catalyst Enhanced

-0.63

Correlation Coefficient

Spire Global  Catalyst Enhanced

Excellent diversification

The 3 months correlation between Spire and Catalyst is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Catalyst Enhanced Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Enhanced Income 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 Catalyst Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Enhanced Income has no effect on the direction of Spire Global i.e., Spire Global and Catalyst Enhanced go up and down completely randomly.

Pair Corralation between Spire Global and Catalyst Enhanced

Given the investment horizon of 90 days Spire Global is expected to under-perform the Catalyst Enhanced. In addition to that, Spire Global is 26.84 times more volatile than Catalyst Enhanced Income. It trades about -0.05 of its total potential returns per unit of risk. Catalyst Enhanced Income is currently generating about 0.07 per unit of volatility. If you would invest  789.00  in Catalyst Enhanced Income on December 26, 2024 and sell it today you would earn a total of  10.00  from holding Catalyst Enhanced Income or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Spire Global  vs.  Catalyst Enhanced Income

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.

Catalyst Enhanced Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Enhanced Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalyst Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spire Global and Catalyst Enhanced

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

The idea behind Spire Global and Catalyst Enhanced Income 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.