Correlation Between Spire Global and Sambo Corrugated

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Can any of the company-specific risk be diversified away by investing in both Spire Global and Sambo Corrugated 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 Sambo Corrugated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Sambo Corrugated Board, you can compare the effects of market volatilities on Spire Global and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Sambo Corrugated.

Diversification Opportunities for Spire Global and Sambo Corrugated

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Spire and Sambo is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Spire Global i.e., Spire Global and Sambo Corrugated go up and down completely randomly.

Pair Corralation between Spire Global and Sambo Corrugated

Given the investment horizon of 90 days Spire Global is expected to generate 5.47 times more return on investment than Sambo Corrugated. However, Spire Global is 5.47 times more volatile than Sambo Corrugated Board. It trades about 0.05 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.03 per unit of risk. If you would invest  960.00  in Spire Global on September 5, 2024 and sell it today you would earn a total of  517.00  from holding Spire Global or generate 53.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy97.58%
ValuesDaily Returns

Spire Global  vs.  Sambo Corrugated Board

 Performance 
       Timeline  
Spire Global 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Spire Global reported solid returns over the last few months and may actually be approaching a breakup point.
Sambo Corrugated Board 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sambo Corrugated Board has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Spire Global and Sambo Corrugated Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Spire Global and Sambo Corrugated

The main advantage of trading using opposite Spire Global and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.
The idea behind Spire Global and Sambo Corrugated Board pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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