Correlation Between Spire Global and Perion Network
Can any of the company-specific risk be diversified away by investing in both Spire Global and Perion Network 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 Perion Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Perion Network, you can compare the effects of market volatilities on Spire Global and Perion Network 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 Perion Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Perion Network.
Diversification Opportunities for Spire Global and Perion Network
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spire and Perion is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Perion Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perion Network 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 Perion Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perion Network has no effect on the direction of Spire Global i.e., Spire Global and Perion Network go up and down completely randomly.
Pair Corralation between Spire Global and Perion Network
Given the investment horizon of 90 days Spire Global is expected to under-perform the Perion Network. In addition to that, Spire Global is 3.32 times more volatile than Perion Network. It trades about -0.05 of its total potential returns per unit of risk. Perion Network is currently generating about -0.01 per unit of volatility. If you would invest 848.00 in Perion Network on December 28, 2024 and sell it today you would lose (34.00) from holding Perion Network or give up 4.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Spire Global vs. Perion Network
Performance |
Timeline |
Spire Global |
Perion Network |
Spire Global and Perion Network Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spire Global and Perion Network
The main advantage of trading using opposite Spire Global and Perion Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Perion Network 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 Perion Network will offset losses from the drop in Perion Network's long position.Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Network 1 Technologies |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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