Correlation Between Spire Global and Fubon NASDAQ
Can any of the company-specific risk be diversified away by investing in both Spire Global and Fubon NASDAQ 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 Spire Global and Fubon NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Fubon NASDAQ 100 2X, you can compare the effects of market volatilities on Spire Global and Fubon NASDAQ 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 Spire Global with a short position of Fubon NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Fubon NASDAQ.
Diversification Opportunities for Spire Global and Fubon NASDAQ
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spire and Fubon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Fubon NASDAQ 100 2X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fubon NASDAQ 100 and Spire 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 Spire Global are associated (or correlated) with Fubon NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fubon NASDAQ 100 has no effect on the direction of Spire Global i.e., Spire Global and Fubon NASDAQ go up and down completely randomly.
Pair Corralation between Spire Global and Fubon NASDAQ
Given the investment horizon of 90 days Spire Global is expected to generate 2.8 times more return on investment than Fubon NASDAQ. However, Spire Global is 2.8 times more volatile than Fubon NASDAQ 100 2X. It trades about 0.45 of its potential returns per unit of risk. Fubon NASDAQ 100 2X is currently generating about 0.2 per unit of risk. If you would invest 1,091 in Spire Global on September 3, 2024 and sell it today you would earn a total of 543.00 from holding Spire Global or generate 49.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Spire Global vs. Fubon NASDAQ 100 2X
Performance |
| Timeline |
| Spire Global |
| Fubon NASDAQ 100 |
Spire Global and Fubon NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Fubon NASDAQ
The main advantage of trading using opposite Spire Global and Fubon NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Fubon NASDAQ 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 Fubon NASDAQ will offset losses from the drop in Fubon NASDAQ's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Fubon NASDAQ vs. Fubon Hang Seng | Fubon NASDAQ vs. Fubon SP Preferred | Fubon NASDAQ vs. Fubon NASDAQ 100 1X | Fubon NASDAQ vs. Fubon TWSE Corporate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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