Correlation Between Spire Global and Salmon Evolution
Can any of the company-specific risk be diversified away by investing in both Spire Global and Salmon Evolution 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 Salmon Evolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Salmon Evolution Holding, you can compare the effects of market volatilities on Spire Global and Salmon Evolution 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 Salmon Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Salmon Evolution.
Diversification Opportunities for Spire Global and Salmon Evolution
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Spire and Salmon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Salmon Evolution Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salmon Evolution Holding 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 Salmon Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salmon Evolution Holding has no effect on the direction of Spire Global i.e., Spire Global and Salmon Evolution go up and down completely randomly.
Pair Corralation between Spire Global and Salmon Evolution
Given the investment horizon of 90 days Spire Global is expected to generate 3.48 times more return on investment than Salmon Evolution. However, Spire Global is 3.48 times more volatile than Salmon Evolution Holding. It trades about 0.1 of its potential returns per unit of risk. Salmon Evolution Holding is currently generating about -0.08 per unit of risk. If you would invest 921.00 in Spire Global on September 5, 2024 and sell it today you would earn a total of 556.00 from holding Spire Global or generate 60.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Spire Global vs. Salmon Evolution Holding
Performance |
| Timeline |
| Spire Global |
| Salmon Evolution Holding |
Spire Global and Salmon Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Salmon Evolution
The main advantage of trading using opposite Spire Global and Salmon Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Salmon Evolution 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 Salmon Evolution will offset losses from the drop in Salmon Evolution's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Salmon Evolution vs. BW Offshore | Salmon Evolution vs. Romsdal Sparebank | Salmon Evolution vs. Clean Seas Seafood | Salmon Evolution vs. Sparebank 1 SMN |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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