Correlation Between Spire Global and Emeren
Can any of the company-specific risk be diversified away by investing in both Spire Global and Emeren 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 Emeren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Emeren Group, you can compare the effects of market volatilities on Spire Global and Emeren 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 Emeren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Emeren.
Diversification Opportunities for Spire Global and Emeren
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spire and Emeren is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren 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 Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of Spire Global i.e., Spire Global and Emeren go up and down completely randomly.
Pair Corralation between Spire Global and Emeren
Given the investment horizon of 90 days Spire Global is expected to generate 0.92 times more return on investment than Emeren. However, Spire Global is 1.09 times less risky than Emeren. It trades about 0.51 of its potential returns per unit of risk. Emeren Group is currently generating about -0.18 per unit of risk. If you would invest 960.00 in Spire Global on August 29, 2024 and sell it today you would earn a total of 657.00 from holding Spire Global or generate 68.44% 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. Emeren Group
Performance |
| Timeline |
| Spire Global |
| Emeren Group |
Spire Global and Emeren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Emeren
The main advantage of trading using opposite Spire Global and Emeren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, Emeren 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 Emeren will offset losses from the drop in Emeren's long position.| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
| Emeren vs. Canadian Solar | Emeren vs. Maxeon Solar Technologies | Emeren vs. SolarEdge Technologies | Emeren vs. Sunnova Energy International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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