Correlation Between Spire Global and Fujitsu
Can any of the company-specific risk be diversified away by investing in both Spire Global and Fujitsu 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 Fujitsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Fujitsu Ltd ADR, you can compare the effects of market volatilities on Spire Global and Fujitsu 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 Fujitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Fujitsu.
Diversification Opportunities for Spire Global and Fujitsu
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and Fujitsu is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Fujitsu Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujitsu Ltd ADR 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 Fujitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujitsu Ltd ADR has no effect on the direction of Spire Global i.e., Spire Global and Fujitsu go up and down completely randomly.
Pair Corralation between Spire Global and Fujitsu
Given the investment horizon of 90 days Spire Global is expected to generate 2.1 times more return on investment than Fujitsu. However, Spire Global is 2.1 times more volatile than Fujitsu Ltd ADR. It trades about 0.31 of its potential returns per unit of risk. Fujitsu Ltd ADR is currently generating about -0.08 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Global vs. Fujitsu Ltd ADR
Performance |
| Timeline |
| Spire Global |
| Fujitsu Ltd ADR |
Spire Global and Fujitsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Fujitsu
The main advantage of trading using opposite Spire Global and Fujitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Fujitsu 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 Fujitsu will offset losses from the drop in Fujitsu's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Fujitsu vs. Eline Entertainment Group | Fujitsu vs. Green Leaf Innovations | Fujitsu vs. Plandai Biotech | Fujitsu vs. All American Gld |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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