Correlation Between Spirent Communications and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both Spirent Communications and MAVEN WIRELESS 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 Spirent Communications and MAVEN WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on Spirent Communications and MAVEN WIRELESS 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 Spirent Communications with a short position of MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and MAVEN WIRELESS.
Diversification Opportunities for Spirent Communications and MAVEN WIRELESS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spirent and MAVEN is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN and Spirent Communications 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 Spirent Communications plc are associated (or correlated) with MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of Spirent Communications i.e., Spirent Communications and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between Spirent Communications and MAVEN WIRELESS
Assuming the 90 days horizon Spirent Communications plc is expected to under-perform the MAVEN WIRELESS. But the stock apears to be less risky and, when comparing its historical volatility, Spirent Communications plc is 1.18 times less risky than MAVEN WIRELESS. The stock trades about -0.03 of its potential returns per unit of risk. The MAVEN WIRELESS SWEDEN is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 87.00 in MAVEN WIRELESS SWEDEN on November 1, 2024 and sell it today you would earn a total of 11.00 from holding MAVEN WIRELESS SWEDEN or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. MAVEN WIRELESS SWEDEN
Performance |
| Timeline |
| Spirent Communications |
| MAVEN WIRELESS SWEDEN |
Spirent Communications and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and MAVEN WIRELESS
The main advantage of trading using opposite Spirent Communications and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.| Spirent Communications vs. SUN LIFE FINANCIAL | Spirent Communications vs. CDN IMPERIAL BANK | Spirent Communications vs. CHIBA BANK | Spirent Communications vs. WIMFARM SA EO |
| MAVEN WIRELESS vs. Coor Service Management | MAVEN WIRELESS vs. Sims Metal Management | MAVEN WIRELESS vs. CeoTronics AG | MAVEN WIRELESS vs. Cleanaway Waste Management |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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