Correlation Between SP Global and Coinbase Global
Can any of the company-specific risk be diversified away by investing in both SP Global and Coinbase 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 SP Global and Coinbase Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Coinbase Global, you can compare the effects of market volatilities on SP Global and Coinbase 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 SP Global with a short position of Coinbase Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Coinbase Global.
Diversification Opportunities for SP Global and Coinbase Global
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPGI and Coinbase is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Coinbase Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Global and SP Global 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 SP Global are associated (or correlated) with Coinbase Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Global has no effect on the direction of SP Global i.e., SP Global and Coinbase Global go up and down completely randomly.
Pair Corralation between SP Global and Coinbase Global
Given the investment horizon of 90 days SP Global is expected to generate 6.87 times less return on investment than Coinbase Global. But when comparing it to its historical volatility, SP Global is 11.8 times less risky than Coinbase Global. It trades about 0.38 of its potential returns per unit of risk. Coinbase Global is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 21,610 in Coinbase Global on August 27, 2024 and sell it today you would earn a total of 9,612 from holding Coinbase Global or generate 44.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. Coinbase Global
Performance |
| Timeline |
| SP Global |
| Coinbase Global |
SP Global and Coinbase Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Coinbase Global
The main advantage of trading using opposite SP Global and Coinbase Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global position performs unexpectedly, Coinbase 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 Coinbase Global will offset losses from the drop in Coinbase Global's long position.| SP Global vs. Dun Bradstreet Holdings | SP Global vs. Moodys | SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc |
| Coinbase Global vs. Moodys | Coinbase Global vs. MSCI Inc | Coinbase Global vs. Intercontinental Exchange | Coinbase Global vs. CME Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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