Correlation Between Spire Global and Yong Shun
Can any of the company-specific risk be diversified away by investing in both Spire Global and Yong Shun 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 Yong Shun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Yong Shun Chemical, you can compare the effects of market volatilities on Spire Global and Yong Shun 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 Yong Shun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Yong Shun.
Diversification Opportunities for Spire Global and Yong Shun
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and Yong is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Yong Shun Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Shun Chemical 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 Yong Shun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Shun Chemical has no effect on the direction of Spire Global i.e., Spire Global and Yong Shun go up and down completely randomly.
Pair Corralation between Spire Global and Yong Shun
Given the investment horizon of 90 days Spire Global is expected to generate 3.61 times more return on investment than Yong Shun. However, Spire Global is 3.61 times more volatile than Yong Shun Chemical. It trades about 0.24 of its potential returns per unit of risk. Yong Shun Chemical is currently generating about -0.25 per unit of risk. If you would invest 1,150 in Spire Global on September 12, 2024 and sell it today you would earn a total of 266.00 from holding Spire Global or generate 23.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Spire Global vs. Yong Shun Chemical
Performance |
| Timeline |
| Spire Global |
| Yong Shun Chemical |
Spire Global and Yong Shun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Yong Shun
The main advantage of trading using opposite Spire Global and Yong Shun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Yong Shun 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 Yong Shun will offset losses from the drop in Yong Shun's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Yong Shun vs. Tainan Spinning Co | Yong Shun vs. Lealea Enterprise Co | Yong Shun vs. China Petrochemical Development | Yong Shun vs. Ruentex Development 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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