Correlation Between Spirit Telecom and FSA
Can any of the company-specific risk be diversified away by investing in both Spirit Telecom and FSA 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 Spirit Telecom and FSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Telecom and FSA Group, you can compare the effects of market volatilities on Spirit Telecom and FSA 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 Spirit Telecom with a short position of FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Telecom and FSA.
Diversification Opportunities for Spirit Telecom and FSA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spirit and FSA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Telecom and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group and Spirit Telecom 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 Spirit Telecom are associated (or correlated) with FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Spirit Telecom i.e., Spirit Telecom and FSA go up and down completely randomly.
Pair Corralation between Spirit Telecom and FSA
Assuming the 90 days trading horizon Spirit Telecom is expected to generate 3.28 times more return on investment than FSA. However, Spirit Telecom is 3.28 times more volatile than FSA Group. It trades about 0.01 of its potential returns per unit of risk. FSA Group is currently generating about -0.01 per unit of risk. If you would invest 69.00 in Spirit Telecom on November 6, 2024 and sell it today you would lose (14.00) from holding Spirit Telecom or give up 20.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirit Telecom vs. FSA Group
Performance |
| Timeline |
| Spirit Telecom |
| FSA Group |
Spirit Telecom and FSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Telecom and FSA
The main advantage of trading using opposite Spirit Telecom and FSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Telecom position performs unexpectedly, FSA 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 FSA will offset losses from the drop in FSA's long position.| Spirit Telecom vs. 29Metals | Spirit Telecom vs. Black Rock Mining | Spirit Telecom vs. Stelar Metals | Spirit Telecom vs. Metro Mining |
| FSA vs. Ora Banda Mining | FSA vs. Truscott Mining Corp | FSA vs. Sun Silver Limited | FSA vs. Super Retail Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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