Correlation Between Spire and Black Hills
Can any of the company-specific risk be diversified away by investing in both Spire and Black Hills 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 and Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Inc and Black Hills, you can compare the effects of market volatilities on Spire and Black Hills 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 with a short position of Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire and Black Hills.
Diversification Opportunities for Spire and Black Hills
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spire and Black is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Spire Inc and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills and Spire 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 Inc are associated (or correlated) with Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Spire i.e., Spire and Black Hills go up and down completely randomly.
Pair Corralation between Spire and Black Hills
Allowing for the 90-day total investment horizon Spire Inc is expected to generate 1.38 times more return on investment than Black Hills. However, Spire is 1.38 times more volatile than Black Hills. It trades about 0.18 of its potential returns per unit of risk. Black Hills is currently generating about -0.12 per unit of risk. If you would invest 6,495 in Spire Inc on September 14, 2024 and sell it today you would earn a total of 316.00 from holding Spire Inc or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Inc vs. Black Hills
Performance |
| Timeline |
| Spire Inc |
| Black Hills |
Spire and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire and Black Hills
The main advantage of trading using opposite Spire and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Spire vs. Northwest Natural Gas | Spire vs. Chesapeake Utilities | Spire vs. One Gas | Spire vs. NewJersey Resources |
| Black Hills vs. NewJersey Resources | Black Hills vs. Northwest Natural Gas | Black Hills vs. Spire Inc | Black Hills vs. Chesapeake Utilities |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |