Correlation Between Spire Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Spire Global and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Western Asset California, you can compare the effects of market volatilities on Spire Global and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Western Asset.
Diversification Opportunities for Spire Global and Western Asset
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spire and Western is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Western Asset California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset California 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset California has no effect on the direction of Spire Global i.e., Spire Global and Western Asset go up and down completely randomly.
Pair Corralation between Spire Global and Western Asset
Given the investment horizon of 90 days Spire Global is expected to generate 26.18 times more return on investment than Western Asset. However, Spire Global is 26.18 times more volatile than Western Asset California. It trades about 0.04 of its potential returns per unit of risk. Western Asset California is currently generating about 0.06 per unit of risk. If you would invest 1,016 in Spire Global on September 4, 2024 and sell it today you would earn a total of 541.00 from holding Spire Global or generate 53.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Global vs. Western Asset California
Performance |
| Timeline |
| Spire Global |
| Western Asset California |
Spire Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Western Asset
The main advantage of trading using opposite Spire Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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