Correlation Between Spire Global and IShares II
Can any of the company-specific risk be diversified away by investing in both Spire Global and IShares II 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 IShares II into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and iShares II Public, you can compare the effects of market volatilities on Spire Global and IShares II 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 IShares II. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and IShares II.
Diversification Opportunities for Spire Global and IShares II
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spire and IShares is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and iShares II Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares II Public 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 IShares II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares II Public has no effect on the direction of Spire Global i.e., Spire Global and IShares II go up and down completely randomly.
Pair Corralation between Spire Global and IShares II
Given the investment horizon of 90 days Spire Global is expected to generate 15.43 times more return on investment than IShares II. However, Spire Global is 15.43 times more volatile than iShares II Public. It trades about 0.09 of its potential returns per unit of risk. iShares II Public is currently generating about 0.08 per unit of risk. If you would invest 680.00 in Spire Global on September 4, 2024 and sell it today you would earn a total of 877.00 from holding Spire Global or generate 128.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Spire Global vs. iShares II Public
Performance |
| Timeline |
| Spire Global |
| iShares II Public |
Spire Global and IShares II Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and IShares II
The main advantage of trading using opposite Spire Global and IShares II positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, IShares II 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 IShares II will offset losses from the drop in IShares II's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| IShares II vs. Vanguard FTSE Developed | IShares II vs. HSBC MSCI Japan | IShares II vs. iShares II Public | IShares II vs. Hydratec Industries NV |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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