Correlation Between Spire Global and Canadian National
Can any of the company-specific risk be diversified away by investing in both Spire Global and Canadian National 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 Canadian National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Canadian National Railway, you can compare the effects of market volatilities on Spire Global and Canadian National 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 Canadian National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Canadian National.
Diversification Opportunities for Spire Global and Canadian National
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spire and Canadian is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Canadian National Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian National Railway 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 Canadian National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian National Railway has no effect on the direction of Spire Global i.e., Spire Global and Canadian National go up and down completely randomly.
Pair Corralation between Spire Global and Canadian National
Given the investment horizon of 90 days Spire Global is expected to generate 3.07 times more return on investment than Canadian National. However, Spire Global is 3.07 times more volatile than Canadian National Railway. It trades about 0.31 of its potential returns per unit of risk. Canadian National Railway is currently generating about 0.05 per unit of risk. If you would invest 995.00 in Spire Global on September 3, 2024 and sell it today you would earn a total of 639.00 from holding Spire Global or generate 64.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Spire Global vs. Canadian National Railway
Performance |
| Timeline |
| Spire Global |
| Canadian National Railway |
Spire Global and Canadian National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Canadian National
The main advantage of trading using opposite Spire Global and Canadian National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Canadian National 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 Canadian National will offset losses from the drop in Canadian National's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Canadian National vs. Superior Plus Corp | Canadian National vs. NMI Holdings | Canadian National vs. Origin Agritech | Canadian National vs. SIVERS SEMICONDUCTORS AB |
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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