Correlation Between Spire Global and 902613AX6

Can any of the company-specific risk be diversified away by investing in both Spire Global and 902613AX6 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 902613AX6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Spire Global and UBS Group 375, you can compare the effects of market volatilities on Spire Global and 902613AX6 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 902613AX6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and 902613AX6.

Diversification Opportunities for Spire Global and 902613AX6

0.35

Correlation Coefficient

Spire Global  902613AX6

Weak diversification

The 3 months correlation between Spire and 902613AX6 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and UBS Group 375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Group 375 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 902613AX6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Group 375 has no effect on the direction of Spire Global i.e., Spire Global and 902613AX6 go up and down completely randomly.

Pair Corralation between Spire Global and 902613AX6

Given the investment horizon of 90 days Spire Global is expected to generate 18.7 times more return on investment than 902613AX6. However, Spire Global is 18.7 times more volatile than UBS Group 375. It trades about 0.21 of its potential returns per unit of risk. UBS Group 375 is currently generating about 0.03 per unit of risk. If you would invest  856.00  in Spire Global on September 12, 2024 and sell it today you would earn a total of  560.00  from holding Spire Global or generate 65.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Spire Global  vs.  UBS Group 375

Spire Global

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Spire Global reported solid returns over the last few months and may actually be approaching a breakup point.

UBS Group 375

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Group 375 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 902613AX6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spire Global and 902613AX6

The main advantage of trading using opposite Spire Global and 902613AX6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, 902613AX6 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 902613AX6 will offset losses from the drop in 902613AX6's long position.

The idea behind Spire Global and UBS Group 375 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.