Correlation Between VCI Global and Spire Global

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

By analyzing existing cross correlation between VCI Global Limited and Spire Global, you can compare the effects of market volatilities on VCI Global and Spire Global 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 VCI Global with a short position of Spire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and Spire Global.

Diversification Opportunities for VCI Global and Spire Global

0.02

Correlation Coefficient

VCI Global  Spire Global

Significant diversification

The 3 months correlation between VCI and Spire is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Spire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Global and VCI 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 VCI Global Limited are associated (or correlated) with Spire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Global has no effect on the direction of VCI Global i.e., VCI Global and Spire Global go up and down completely randomly.

Pair Corralation between VCI Global and Spire Global

Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Spire Global. But the stock apears to be less risky and, when comparing its historical volatility, VCI Global Limited is 1.97 times less risky than Spire Global. The stock trades about -0.36 of its potential returns per unit of risk. The Spire Global is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,782  in Spire Global on December 1, 2024 and sell it today you would lose (641.00) from holding Spire Global or give up 35.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

VCI Global Limited  vs.  Spire Global

VCI Global Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 relatively invariable forward indicators, Spire Global is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with VCI Global and Spire Global

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

The idea behind VCI Global Limited and Spire Global 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.