Correlation Between Spire Global and AJ LUCAS
Can any of the company-specific risk be diversified away by investing in both Spire Global and AJ LUCAS 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 AJ LUCAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and AJ LUCAS GROUP, you can compare the effects of market volatilities on Spire Global and AJ LUCAS 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 AJ LUCAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and AJ LUCAS.
Diversification Opportunities for Spire Global and AJ LUCAS
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and FW9 is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and AJ LUCAS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ LUCAS GROUP 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 AJ LUCAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ LUCAS GROUP has no effect on the direction of Spire Global i.e., Spire Global and AJ LUCAS go up and down completely randomly.
Pair Corralation between Spire Global and AJ LUCAS
Given the investment horizon of 90 days Spire Global is expected to generate 4.01 times less return on investment than AJ LUCAS. But when comparing it to its historical volatility, Spire Global is 3.78 times less risky than AJ LUCAS. It trades about 0.05 of its potential returns per unit of risk. AJ LUCAS GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.30 in AJ LUCAS GROUP on September 3, 2024 and sell it today you would lose (2.25) from holding AJ LUCAS GROUP or give up 97.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Spire Global vs. AJ LUCAS GROUP
Performance |
| Timeline |
| Spire Global |
| AJ LUCAS GROUP |
Spire Global and AJ LUCAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and AJ LUCAS
The main advantage of trading using opposite Spire Global and AJ LUCAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, AJ LUCAS 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 AJ LUCAS will offset losses from the drop in AJ LUCAS's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| AJ LUCAS vs. Gol Intelligent Airlines | AJ LUCAS vs. PUBLIC STORAGE PRFO | AJ LUCAS vs. DICKER DATA LTD | AJ LUCAS vs. DATAGROUP SE |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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