Correlation Between Spire Global and XAC Automation
Can any of the company-specific risk be diversified away by investing in both Spire Global and XAC Automation 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 XAC Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and XAC Automation, you can compare the effects of market volatilities on Spire Global and XAC Automation 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 XAC Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and XAC Automation.
Diversification Opportunities for Spire Global and XAC Automation
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Spire and XAC is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and XAC Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAC Automation 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 XAC Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAC Automation has no effect on the direction of Spire Global i.e., Spire Global and XAC Automation go up and down completely randomly.
Pair Corralation between Spire Global and XAC Automation
Given the investment horizon of 90 days Spire Global is expected to generate 2.85 times more return on investment than XAC Automation. However, Spire Global is 2.85 times more volatile than XAC Automation. It trades about 0.05 of its potential returns per unit of risk. XAC Automation is currently generating about 0.03 per unit of risk. If you would invest 1,000.00 in Spire Global on September 3, 2024 and sell it today you would earn a total of 634.00 from holding Spire Global or generate 63.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Spire Global vs. XAC Automation
Performance |
| Timeline |
| Spire Global |
| XAC Automation |
Spire Global and XAC Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and XAC Automation
The main advantage of trading using opposite Spire Global and XAC Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, XAC Automation 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 XAC Automation will offset losses from the drop in XAC Automation's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| XAC Automation vs. Chinese Maritime Transport | XAC Automation vs. Lian Hwa Foods | XAC Automation vs. Emerging Display Technologies | XAC Automation vs. Mercuries Life Insurance |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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