Correlation Between Spire Global and Federated Government
Can any of the company-specific risk be diversified away by investing in both Spire Global and Federated Government 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 Federated Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Federated Government Income, you can compare the effects of market volatilities on Spire Global and Federated Government 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 Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Federated Government.
Diversification Opportunities for Spire Global and Federated Government
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and Federated is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Federated Government Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government 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 Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Spire Global i.e., Spire Global and Federated Government go up and down completely randomly.
Pair Corralation between Spire Global and Federated Government
Given the investment horizon of 90 days Spire Global is expected to generate 19.29 times more return on investment than Federated Government. However, Spire Global is 19.29 times more volatile than Federated Government Income. It trades about 0.09 of its potential returns per unit of risk. Federated Government Income is currently generating about -0.02 per unit of risk. If you would invest 1,105 in Spire Global on September 5, 2024 and sell it today you would earn a total of 372.00 from holding Spire Global or generate 33.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Global vs. Federated Government Income
Performance |
| Timeline |
| Spire Global |
| Federated Government |
Spire Global and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Federated Government
The main advantage of trading using opposite Spire Global and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Federated Government 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 Federated Government will offset losses from the drop in Federated Government's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Federated Government vs. Baird Smallmid Cap | Federated Government vs. Oklahoma College Savings | Federated Government vs. Champlain Small | Federated Government vs. The Hartford Small |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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