Correlation Between Spire Global and Power Nickel
Can any of the company-specific risk be diversified away by investing in both Spire Global and Power Nickel 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 Power Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Power Nickel, you can compare the effects of market volatilities on Spire Global and Power Nickel 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 Power Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Power Nickel.
Diversification Opportunities for Spire Global and Power Nickel
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Spire and Power is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Power Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Nickel 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 Power Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Nickel has no effect on the direction of Spire Global i.e., Spire Global and Power Nickel go up and down completely randomly.
Pair Corralation between Spire Global and Power Nickel
Given the investment horizon of 90 days Spire Global is expected to generate 1.14 times less return on investment than Power Nickel. In addition to that, Spire Global is 1.18 times more volatile than Power Nickel. It trades about 0.09 of its total potential returns per unit of risk. Power Nickel is currently generating about 0.12 per unit of volatility. If you would invest 23.00 in Power Nickel on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Power Nickel or generate 226.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Global vs. Power Nickel
Performance |
| Timeline |
| Spire Global |
| Power Nickel |
Spire Global and Power Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Power Nickel
The main advantage of trading using opposite Spire Global and Power Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Power Nickel 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 Power Nickel will offset losses from the drop in Power Nickel's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Power Nickel vs. Magna Mining | Power Nickel vs. SPC Nickel Corp | Power Nickel vs. Grid Metals Corp | Power Nickel vs. Flying Nickel Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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