Correlation Between GraniteShares 125x and Spire Global
Can any of the company-specific risk be diversified away by investing in both GraniteShares 125x and Spire Global 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 GraniteShares 125x and Spire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 125x Long and Spire Global, you can compare the effects of market volatilities on GraniteShares 125x and Spire Global 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 GraniteShares 125x with a short position of Spire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 125x and Spire Global.
Diversification Opportunities for GraniteShares 125x and Spire Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GraniteShares and Spire is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 125x Long and Spire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Global and GraniteShares 125x 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 GraniteShares 125x Long are associated (or correlated) with Spire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Global has no effect on the direction of GraniteShares 125x i.e., GraniteShares 125x and Spire Global go up and down completely randomly.
Pair Corralation between GraniteShares 125x and Spire Global
Considering the 90-day investment horizon GraniteShares 125x is expected to generate 1.11 times less return on investment than Spire Global. But when comparing it to its historical volatility, GraniteShares 125x Long is 1.22 times less risky than Spire Global. It trades about 0.05 of its potential returns per unit of risk. Spire Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,056 in Spire Global on August 26, 2024 and sell it today you would earn a total of 542.00 from holding Spire Global or generate 51.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 125x Long vs. Spire Global
Performance |
| Timeline |
| GraniteShares 125x Long |
| Spire Global |
GraniteShares 125x and Spire Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares 125x and Spire Global
The main advantage of trading using opposite GraniteShares 125x and Spire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 125x position performs unexpectedly, Spire Global 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 Spire Global will offset losses from the drop in Spire Global's long position.| GraniteShares 125x vs. Direxion Daily SP | GraniteShares 125x vs. Direxion Daily Semiconductor | GraniteShares 125x vs. Direxion Daily Semiconductor |
| Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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