Correlation Between SMX Public and Spire Global
Can any of the company-specific risk be diversified away by investing in both SMX Public 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 SMX Public and Spire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMX Public Limited and Spire Global, you can compare the effects of market volatilities on SMX Public 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 SMX Public with a short position of Spire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and Spire Global.
Diversification Opportunities for SMX Public and Spire Global
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SMX and Spire is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and Spire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Global and SMX Public 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 SMX Public Limited 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 SMX Public i.e., SMX Public and Spire Global go up and down completely randomly.
Pair Corralation between SMX Public and Spire Global
Considering the 90-day investment horizon SMX Public Limited is expected to under-perform the Spire Global. In addition to that, SMX Public is 1.75 times more volatile than Spire Global. It trades about -0.44 of its total potential returns per unit of risk. Spire Global is currently generating about 0.57 per unit of volatility. 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMX Public Limited vs. Spire Global
Performance |
| Timeline |
| SMX Public Limited |
| Spire Global |
SMX Public and Spire Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and Spire Global
The main advantage of trading using opposite SMX Public and Spire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public 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.| SMX Public vs. Genpact Limited | SMX Public vs. Broadridge Financial Solutions | SMX Public vs. First Advantage Corp | SMX Public vs. Franklin Covey |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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