Correlation Between Spire Global and Strats Trust

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

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

Diversification Opportunities for Spire Global and Strats Trust

-0.36

Correlation Coefficient

Spire Global  Strats Trust

Very good diversification

The 3 months correlation between Spire and Strats is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Strats Trust Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats Trust Cellular 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 Strats Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats Trust Cellular has no effect on the direction of Spire Global i.e., Spire Global and Strats Trust go up and down completely randomly.

Pair Corralation between Spire Global and Strats Trust

Given the investment horizon of 90 days Spire Global is expected to under-perform the Strats Trust. In addition to that, Spire Global is 10.88 times more volatile than Strats Trust Cellular. It trades about -0.05 of its total potential returns per unit of risk. Strats Trust Cellular is currently generating about 0.03 per unit of volatility. If you would invest  955.00  in Strats Trust Cellular on December 25, 2024 and sell it today you would earn a total of  10.00  from holding Strats Trust Cellular or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Spire Global  vs.  Strats Trust Cellular

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.

Strats Trust Cellular

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strats Trust Cellular are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking indicators, Strats Trust is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Spire Global and Strats Trust

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

The idea behind Spire Global and Strats Trust Cellular 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.