Correlation Between Spire Global and Etherfi

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

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

Diversification Opportunities for Spire Global and Etherfi

0.0

Correlation Coefficient

Spire Global  Etherfi

Pay attention - limited upside

The 3 months correlation between Spire and Etherfi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Etherfi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etherfi 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 Etherfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etherfi has no effect on the direction of Spire Global i.e., Spire Global and Etherfi go up and down completely randomly.

Pair Corralation between Spire Global and Etherfi

Given the investment horizon of 90 days Spire Global is expected to generate 1.97 times more return on investment than Etherfi. However, Spire Global is 1.97 times more volatile than Etherfi. It trades about -0.08 of its potential returns per unit of risk. Etherfi is currently generating about -0.3 per unit of risk. If you would invest  1,715  in Spire Global on December 2, 2024 and sell it today you would lose (574.00) from holding Spire Global or give up 33.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Spire Global  vs.  Etherfi

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.

Etherfi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Etherfi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Etherfi shareholders.

Pair Trading with Spire Global and Etherfi

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

The idea behind Spire Global and Etherfi 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.