Correlation Between Spire Global and Bin Chuan
Can any of the company-specific risk be diversified away by investing in both Spire Global and Bin Chuan 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 Bin Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Bin Chuan Enterprise, you can compare the effects of market volatilities on Spire Global and Bin Chuan 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 Bin Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Bin Chuan.
Diversification Opportunities for Spire Global and Bin Chuan
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Spire and Bin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Bin Chuan Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bin Chuan Enterprise 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 Bin Chuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bin Chuan Enterprise has no effect on the direction of Spire Global i.e., Spire Global and Bin Chuan go up and down completely randomly.
Pair Corralation between Spire Global and Bin Chuan
Given the investment horizon of 90 days Spire Global is expected to generate 1.51 times less return on investment than Bin Chuan. In addition to that, Spire Global is 1.22 times more volatile than Bin Chuan Enterprise. It trades about 0.31 of its total potential returns per unit of risk. Bin Chuan Enterprise is currently generating about 0.57 per unit of volatility. If you would invest 3,930 in Bin Chuan Enterprise on September 4, 2024 and sell it today you would earn a total of 2,550 from holding Bin Chuan Enterprise or generate 64.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Spire Global vs. Bin Chuan Enterprise
Performance |
| Timeline |
| Spire Global |
| Bin Chuan Enterprise |
Spire Global and Bin Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Bin Chuan
The main advantage of trading using opposite Spire Global and Bin Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Bin Chuan 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 Bin Chuan will offset losses from the drop in Bin Chuan's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Bin Chuan vs. Holtek Semiconductor | Bin Chuan vs. Orient Semiconductor Electronics | Bin Chuan vs. Davicom Semiconductor | Bin Chuan vs. Taiwan Semiconductor Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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