Correlation Between Spotify Technology and Global Net
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Global Net 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 Spotify Technology and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Global Net Lease, you can compare the effects of market volatilities on Spotify Technology and Global Net 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 Spotify Technology with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Global Net.
Diversification Opportunities for Spotify Technology and Global Net
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spotify and Global is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Spotify Technology i.e., Spotify Technology and Global Net go up and down completely randomly.
Pair Corralation between Spotify Technology and Global Net
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 2.36 times more return on investment than Global Net. However, Spotify Technology is 2.36 times more volatile than Global Net Lease. It trades about 0.23 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.13 per unit of risk. If you would invest 39,005 in Spotify Technology SA on September 13, 2024 and sell it today you would earn a total of 6,345 from holding Spotify Technology SA or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Global Net Lease
Performance |
| Timeline |
| Spotify Technology |
| Global Net Lease |
Spotify Technology and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Global Net
The main advantage of trading using opposite Spotify Technology and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Spotify Technology vs. Samsung Electronics Co | Spotify Technology vs. Samsung Electronics Co | Spotify Technology vs. Hyundai Motor | Spotify Technology vs. Reliance Industries Ltd |
| Global Net vs. Samsung Electronics Co | Global Net vs. Samsung Electronics Co | Global Net vs. Hyundai Motor | Global Net vs. Reliance Industries Ltd |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |