Correlation Between Spotify Technology and Getty Images
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Getty Images 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 Spotify Technology and Getty Images into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Getty Images Holdings, you can compare the effects of market volatilities on Spotify Technology and Getty Images 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 Spotify Technology with a short position of Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Getty Images.
Diversification Opportunities for Spotify Technology and Getty Images
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spotify and Getty is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Spotify Technology i.e., Spotify Technology and Getty Images go up and down completely randomly.
Pair Corralation between Spotify Technology and Getty Images
Given the investment horizon of 90 days Spotify Technology SA is expected to generate 0.54 times more return on investment than Getty Images. However, Spotify Technology SA is 1.86 times less risky than Getty Images. It trades about 0.31 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.23 per unit of risk. If you would invest 39,123 in Spotify Technology SA on August 30, 2024 and sell it today you would earn a total of 8,401 from holding Spotify Technology SA or generate 21.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Getty Images Holdings
Performance |
| Timeline |
| Spotify Technology |
| Getty Images Holdings |
Spotify Technology and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Getty Images
The main advantage of trading using opposite Spotify Technology and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.| Spotify Technology vs. Snap Inc | Spotify Technology vs. Twilio Inc | Spotify Technology vs. Fiverr International | Spotify Technology vs. Baidu Inc |
| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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