Correlation Between Spire Global and PT Boston

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

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

Diversification Opportunities for Spire Global and PT Boston

-0.73

Correlation Coefficient

Spire Global  PT Boston

Pay attention - limited upside

The 3 months correlation between Spire and SOFA is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and PT Boston Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Boston Furniture 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 PT Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Boston Furniture has no effect on the direction of Spire Global i.e., Spire Global and PT Boston go up and down completely randomly.

Pair Corralation between Spire Global and PT Boston

Given the investment horizon of 90 days Spire Global is expected to under-perform the PT Boston. In addition to that, Spire Global is 1.42 times more volatile than PT Boston Furniture. It trades about -0.05 of its total potential returns per unit of risk. PT Boston Furniture is currently generating about 0.14 per unit of volatility. If you would invest  4,600  in PT Boston Furniture on December 28, 2024 and sell it today you would earn a total of  2,100  from holding PT Boston Furniture or generate 45.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

Spire Global  vs.  PT Boston Furniture

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.

PT Boston Furniture

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PT Boston Furniture are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Boston disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spire Global and PT Boston

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

The idea behind Spire Global and PT Boston Furniture 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.