Correlation Between Spotify Technology and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Beyond Meat 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 Spotify Technology and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Beyond Meat, you can compare the effects of market volatilities on Spotify Technology and Beyond Meat 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 Spotify Technology with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Beyond Meat.
Diversification Opportunities for Spotify Technology and Beyond Meat
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spotify and Beyond is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Spotify Technology i.e., Spotify Technology and Beyond Meat go up and down completely randomly.
Pair Corralation between Spotify Technology and Beyond Meat
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 0.9 times more return on investment than Beyond Meat. However, Spotify Technology SA is 1.11 times less risky than Beyond Meat. It trades about 0.34 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.18 per unit of risk. If you would invest 56,304 in Spotify Technology SA on August 30, 2024 and sell it today you would earn a total of 14,040 from holding Spotify Technology SA or generate 24.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Beyond Meat
Performance |
| Timeline |
| Spotify Technology |
| Beyond Meat |
Spotify Technology and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Beyond Meat
The main advantage of trading using opposite Spotify Technology and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| Spotify Technology vs. American Airlines Group | Spotify Technology vs. Costco Wholesale | Spotify Technology vs. Micron Technology | Spotify Technology vs. Palantir Technologies |
| Beyond Meat vs. JBS SA | Beyond Meat vs. M Dias Branco | Beyond Meat vs. Marfrig Global Foods | Beyond Meat vs. Camil Alimentos SA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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