Correlation Between Spotify Technology and Apax Global
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Apax 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 Spotify Technology and Apax Global 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 Apax Global Alpha, you can compare the effects of market volatilities on Spotify Technology and Apax 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 Spotify Technology with a short position of Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Apax Global.
Diversification Opportunities for Spotify Technology and Apax Global
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spotify and Apax is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha 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 Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of Spotify Technology i.e., Spotify Technology and Apax Global go up and down completely randomly.
Pair Corralation between Spotify Technology and Apax Global
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 1.39 times more return on investment than Apax Global. However, Spotify Technology is 1.39 times more volatile than Apax Global Alpha. It trades about 0.16 of its potential returns per unit of risk. Apax Global Alpha is currently generating about -0.02 per unit of risk. If you would invest 7,285 in Spotify Technology SA on September 14, 2024 and sell it today you would earn a total of 38,065 from holding Spotify Technology SA or generate 522.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.59% |
| Values | Daily Returns |
Spotify Technology SA vs. Apax Global Alpha
Performance |
| Timeline |
| Spotify Technology |
| Apax Global Alpha |
Spotify Technology and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Apax Global
The main advantage of trading using opposite Spotify Technology and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Apax 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 Apax Global will offset losses from the drop in Apax Global'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 |
| Apax Global vs. Spotify Technology SA | Apax Global vs. Cognizant Technology Solutions | Apax Global vs. Alfa Financial Software | Apax Global vs. Ocean Harvest Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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