Correlation Between Spire Global and Canadian Life

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

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

Diversification Opportunities for Spire Global and Canadian Life

0.21

Correlation Coefficient

Spire Global  Canadian Life

Modest diversification

The 3 months correlation between Spire and Canadian is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Canadian Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Life Companies 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 Canadian Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Life Companies has no effect on the direction of Spire Global i.e., Spire Global and Canadian Life go up and down completely randomly.

Pair Corralation between Spire Global and Canadian Life

Given the investment horizon of 90 days Spire Global is expected to under-perform the Canadian Life. In addition to that, Spire Global is 3.89 times more volatile than Canadian Life Companies. It trades about -0.05 of its total potential returns per unit of risk. Canadian Life Companies is currently generating about -0.05 per unit of volatility. If you would invest  667.00  in Canadian Life Companies on December 29, 2024 and sell it today you would lose (56.00) from holding Canadian Life Companies or give up 8.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Spire Global  vs.  Canadian Life Companies

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.

Canadian Life Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian Life Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Spire Global and Canadian Life

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

The idea behind Spire Global and Canadian Life Companies 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.