Correlation Between Spire Global and Solocal Group

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

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

Diversification Opportunities for Spire Global and Solocal Group

-0.71

Correlation Coefficient

Spire Global  Solocal Group

Pay attention - limited upside

The 3 months correlation between Spire and Solocal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Solocal Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solocal Group SA 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 Solocal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solocal Group SA has no effect on the direction of Spire Global i.e., Spire Global and Solocal Group go up and down completely randomly.

Pair Corralation between Spire Global and Solocal Group

Given the investment horizon of 90 days Spire Global is expected to under-perform the Solocal Group. In addition to that, Spire Global is 2.62 times more volatile than Solocal Group SA. It trades about -0.05 of its total potential returns per unit of risk. Solocal Group SA is currently generating about 0.11 per unit of volatility. If you would invest  230.00  in Solocal Group SA on December 30, 2024 and sell it today you would earn a total of  51.00  from holding Solocal Group SA or generate 22.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

Spire Global  vs.  Solocal Group SA

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.

Solocal Group SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Solocal Group SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Solocal Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spire Global and Solocal Group

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

The idea behind Spire Global and Solocal Group SA 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.