Correlation Between Beijing Gas and Spire
Can any of the company-specific risk be diversified away by investing in both Beijing Gas 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 Beijing Gas and Spire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Gas Blue and Spire Inc, you can compare the effects of market volatilities on Beijing Gas 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 Beijing Gas with a short position of Spire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Gas and Spire.
Diversification Opportunities for Beijing Gas and Spire
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Spire is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Gas Blue and Spire Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Inc and Beijing Gas 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 Beijing Gas Blue 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 Beijing Gas i.e., Beijing Gas and Spire go up and down completely randomly.
Pair Corralation between Beijing Gas and Spire
Assuming the 90 days horizon Beijing Gas Blue is expected to under-perform the Spire. In addition to that, Beijing Gas is 6.71 times more volatile than Spire Inc. It trades about -0.13 of its total potential returns per unit of risk. Spire Inc is currently generating about 0.14 per unit of volatility. If you would invest 6,370 in Spire Inc on November 8, 2024 and sell it today you would earn a total of 857.00 from holding Spire Inc or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Beijing Gas Blue vs. Spire Inc
Performance |
| Timeline |
| Beijing Gas Blue |
| Spire Inc |
Beijing Gas and Spire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Gas and Spire
The main advantage of trading using opposite Beijing Gas and Spire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Gas 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.| Beijing Gas vs. ENN Energy Holdings | Beijing Gas vs. EverGen Infrastructure Corp | Beijing Gas vs. OPAL Fuels | Beijing Gas vs. Atmos Energy |
| Spire vs. Northwest Natural Gas | Spire vs. Chesapeake Utilities | Spire vs. One Gas | Spire vs. NewJersey Resources |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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