Correlation Between Spire Global and PHINMA Corp
Can any of the company-specific risk be diversified away by investing in both Spire Global and PHINMA Corp 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 PHINMA Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and PHINMA Corp, you can compare the effects of market volatilities on Spire Global and PHINMA Corp 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 PHINMA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and PHINMA Corp.
Diversification Opportunities for Spire Global and PHINMA Corp
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spire and PHINMA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and PHINMA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINMA Corp 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 PHINMA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINMA Corp has no effect on the direction of Spire Global i.e., Spire Global and PHINMA Corp go up and down completely randomly.
Pair Corralation between Spire Global and PHINMA Corp
Given the investment horizon of 90 days Spire Global is expected to generate 2.77 times more return on investment than PHINMA Corp. However, Spire Global is 2.77 times more volatile than PHINMA Corp. It trades about 0.37 of its potential returns per unit of risk. PHINMA Corp is currently generating about -0.01 per unit of risk. If you would invest 1,091 in Spire Global on September 4, 2024 and sell it today you would earn a total of 466.00 from holding Spire Global or generate 42.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Spire Global vs. PHINMA Corp
Performance |
| Timeline |
| Spire Global |
| PHINMA Corp |
Spire Global and PHINMA Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and PHINMA Corp
The main advantage of trading using opposite Spire Global and PHINMA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, PHINMA Corp 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 PHINMA Corp will offset losses from the drop in PHINMA Corp's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| PHINMA Corp vs. SM Investments Corp | PHINMA Corp vs. San Miguel Pure | PHINMA Corp vs. Ayala Corp | PHINMA Corp vs. Ayala Land |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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