Correlation Between Spirent Communications and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both Spirent Communications and Beowulf Mining 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 Spirent Communications and Beowulf Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Beowulf Mining, you can compare the effects of market volatilities on Spirent Communications and Beowulf Mining 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 Spirent Communications with a short position of Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Beowulf Mining.
Diversification Opportunities for Spirent Communications and Beowulf Mining
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spirent and Beowulf is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining and Spirent Communications 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 Spirent Communications plc are associated (or correlated) with Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of Spirent Communications i.e., Spirent Communications and Beowulf Mining go up and down completely randomly.
Pair Corralation between Spirent Communications and Beowulf Mining
Assuming the 90 days trading horizon Spirent Communications plc is expected to generate 0.72 times more return on investment than Beowulf Mining. However, Spirent Communications plc is 1.39 times less risky than Beowulf Mining. It trades about 0.05 of its potential returns per unit of risk. Beowulf Mining is currently generating about -0.08 per unit of risk. If you would invest 12,310 in Spirent Communications plc on September 20, 2024 and sell it today you would earn a total of 5,590 from holding Spirent Communications plc or generate 45.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. Beowulf Mining
Performance |
| Timeline |
| Spirent Communications |
| Beowulf Mining |
Spirent Communications and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and Beowulf Mining
The main advantage of trading using opposite Spirent Communications and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.| Spirent Communications vs. National Atomic Co | Spirent Communications vs. Flutter Entertainment PLC | Spirent Communications vs. Camellia Plc | Spirent Communications vs. Marwyn Value Investors |
| Beowulf Mining vs. Spirent Communications plc | Beowulf Mining vs. Orient Telecoms | Beowulf Mining vs. Axway Software SA | Beowulf Mining vs. Cairo Communication SpA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |