Correlation Between First Advantage and Spire Global
Can any of the company-specific risk be diversified away by investing in both First Advantage and Spire 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 First Advantage and Spire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and Spire Global, you can compare the effects of market volatilities on First Advantage and Spire 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 First Advantage with a short position of Spire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Spire Global.
Diversification Opportunities for First Advantage and Spire Global
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Spire is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Spire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Global and First Advantage 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 First Advantage Corp are associated (or correlated) with Spire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Global has no effect on the direction of First Advantage i.e., First Advantage and Spire Global go up and down completely randomly.
Pair Corralation between First Advantage and Spire Global
Allowing for the 90-day total investment horizon First Advantage is expected to generate 4.33 times less return on investment than Spire Global. But when comparing it to its historical volatility, First Advantage Corp is 1.74 times less risky than Spire Global. It trades about 0.23 of its potential returns per unit of risk. Spire Global is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Spire Global on August 28, 2024 and sell it today you would earn a total of 702.00 from holding Spire Global or generate 73.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. Spire Global
Performance |
| Timeline |
| First Advantage Corp |
| Spire Global |
First Advantage and Spire Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Spire Global
The main advantage of trading using opposite First Advantage and Spire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage position performs unexpectedly, Spire 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 Spire Global will offset losses from the drop in Spire Global's long position.| First Advantage vs. ExlService Holdings | First Advantage vs. WNS Holdings | First Advantage vs. Gartner | First Advantage vs. The Hackett Group |
| Spire Global vs. Genpact Limited | Spire Global vs. Broadridge Financial Solutions | Spire Global vs. First Advantage Corp | Spire Global vs. Franklin Covey |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |