Correlation Between Equitable Holdings and Spire
Can any of the company-specific risk be diversified away by investing in both Equitable Holdings 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 Equitable Holdings and Spire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Holdings and Spire Inc, you can compare the effects of market volatilities on Equitable Holdings 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 Equitable Holdings with a short position of Spire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and Spire.
Diversification Opportunities for Equitable Holdings and Spire
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Equitable and Spire is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and Spire Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Inc and Equitable Holdings 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 Equitable Holdings 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 Equitable Holdings i.e., Equitable Holdings and Spire go up and down completely randomly.
Pair Corralation between Equitable Holdings and Spire
Assuming the 90 days trading horizon Equitable Holdings is expected to under-perform the Spire. In addition to that, Equitable Holdings is 1.64 times more volatile than Spire Inc. It trades about -0.11 of its total potential returns per unit of risk. Spire Inc is currently generating about -0.04 per unit of volatility. If you would invest 2,452 in Spire Inc on November 25, 2024 and sell it today you would lose (10.00) from holding Spire Inc or give up 0.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Equitable Holdings vs. Spire Inc
Performance |
Timeline |
Equitable Holdings |
Spire Inc |
Equitable Holdings and Spire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Equitable Holdings and Spire
The main advantage of trading using opposite Equitable Holdings and Spire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable Holdings 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.Equitable Holdings vs. Equitable Holdings | ||
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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