Correlation Between Spire Global and VP Bank
Can any of the company-specific risk be diversified away by investing in both Spire Global and VP Bank 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 VP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and VP Bank AG, you can compare the effects of market volatilities on Spire Global and VP Bank 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 VP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and VP Bank.
Diversification Opportunities for Spire Global and VP Bank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Spire and 3VFN is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG 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 VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Spire Global i.e., Spire Global and VP Bank go up and down completely randomly.
Pair Corralation between Spire Global and VP Bank
Given the investment horizon of 90 days Spire Global is expected to generate 3.0 times more return on investment than VP Bank. However, Spire Global is 3.0 times more volatile than VP Bank AG. It trades about 0.3 of its potential returns per unit of risk. VP Bank AG is currently generating about 0.14 per unit of risk. If you would invest 1,091 in Spire Global on September 5, 2024 and sell it today you would earn a total of 386.00 from holding Spire Global or generate 35.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Spire Global vs. VP Bank AG
Performance |
| Timeline |
| Spire Global |
| VP Bank AG |
Spire Global and VP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and VP Bank
The main advantage of trading using opposite Spire Global and VP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, VP Bank 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 VP Bank will offset losses from the drop in VP Bank's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| VP Bank vs. Jacquet Metal Service | VP Bank vs. GRIFFIN MINING LTD | VP Bank vs. SEKISUI CHEMICAL | VP Bank vs. Mitsubishi Gas Chemical |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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