Correlation Between Atlantica Sustainable and Spire
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable and Spire 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 Atlantica Sustainable and Spire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and Spire Inc, you can compare the effects of market volatilities on Atlantica Sustainable and Spire 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 Atlantica Sustainable with a short position of Spire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and Spire.
Diversification Opportunities for Atlantica Sustainable and Spire
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlantica and Spire is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and Spire Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Inc and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure are associated (or correlated) with Spire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Inc has no effect on the direction of Atlantica Sustainable i.e., Atlantica Sustainable and Spire go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and Spire
Allowing for the 90-day total investment horizon Atlantica Sustainable is expected to generate 2.22 times less return on investment than Spire. But when comparing it to its historical volatility, Atlantica Sustainable Infrastructure is 2.43 times less risky than Spire. It trades about 0.15 of its potential returns per unit of risk. Spire Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,275 in Spire Inc on August 24, 2024 and sell it today you would earn a total of 194.00 from holding Spire Inc or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. Spire Inc
Performance |
| Timeline |
| Atlantica Sustainable |
| Spire Inc |
Atlantica Sustainable and Spire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and Spire
The main advantage of trading using opposite Atlantica Sustainable and Spire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable position performs unexpectedly, Spire 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 will offset losses from the drop in Spire's long position.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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