Correlation Between SP Global and Grab Holdings
Can any of the company-specific risk be diversified away by investing in both SP Global and Grab Holdings 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 Grab Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Grab Holdings, you can compare the effects of market volatilities on SP Global and Grab Holdings 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 Grab Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Grab Holdings.
Diversification Opportunities for SP Global and Grab Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPGI and Grab is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Grab Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab Holdings 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 Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings has no effect on the direction of SP Global i.e., SP Global and Grab Holdings go up and down completely randomly.
Pair Corralation between SP Global and Grab Holdings
Given the investment horizon of 90 days SP Global is expected to generate 0.52 times more return on investment than Grab Holdings. However, SP Global is 1.94 times less risky than Grab Holdings. It trades about 0.23 of its potential returns per unit of risk. Grab Holdings is currently generating about -0.02 per unit of risk. If you would invest 49,803 in SP Global on November 1, 2024 and sell it today you would earn a total of 2,700 from holding SP Global or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. Grab Holdings
Performance |
| Timeline |
| SP Global |
| Grab Holdings |
SP Global and Grab Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Grab Holdings
The main advantage of trading using opposite SP Global and Grab Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global position performs unexpectedly, Grab Holdings 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 Grab Holdings will offset losses from the drop in Grab Holdings' long position.| SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc | SP Global vs. Intercontinental Exchange | SP Global vs. CME Group |
| Grab Holdings vs. LYFT Inc | Grab Holdings vs. Kingsoft Cloud Holdings | Grab Holdings vs. AMTD Digital | Grab Holdings vs. Uber Technologies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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