Correlation Between Spire Global and IShares JP

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

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

Diversification Opportunities for Spire Global and IShares JP

-0.42

Correlation Coefficient

Spire Global  IShares JP

Very good diversification

The 3 months correlation between Spire and IShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan 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 IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of Spire Global i.e., Spire Global and IShares JP go up and down completely randomly.

Pair Corralation between Spire Global and IShares JP

Given the investment horizon of 90 days Spire Global is expected to under-perform the IShares JP. In addition to that, Spire Global is 26.87 times more volatile than iShares JP Morgan. It trades about -0.05 of its total potential returns per unit of risk. iShares JP Morgan is currently generating about 0.09 per unit of volatility. If you would invest  1,545  in iShares JP Morgan on December 29, 2024 and sell it today you would earn a total of  28.00  from holding iShares JP Morgan or generate 1.81% return on investment over 90 days.

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

Spire Global  vs.  iShares JP Morgan

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.

iShares JP Morgan

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares JP Morgan are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares JP is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Spire Global and IShares JP

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

The idea behind Spire Global and iShares JP Morgan 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.