Correlation Between Mistras and Spire Global

Can any of the company-specific risk be diversified away by investing in both Mistras 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 Mistras and Spire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mistras Group and Spire Global, you can compare the effects of market volatilities on Mistras 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 Mistras with a short position of Spire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Spire Global.

Diversification Opportunities for Mistras and Spire Global

-0.69

Correlation Coefficient

Mistras  Spire Global

Excellent diversification

The 3 months correlation between Mistras and Spire is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Spire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Global and Mistras 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 Mistras Group 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 Mistras i.e., Mistras and Spire Global go up and down completely randomly.

Pair Corralation between Mistras and Spire Global

Allowing for the 90-day total investment horizon Mistras Group is expected to under-perform the Spire Global. But the stock apears to be less risky and, when comparing its historical volatility, Mistras Group is 1.1 times less risky than Spire Global. The stock trades about -0.06 of its potential returns per unit of risk. The Spire Global is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  830.00  in Spire Global on September 3, 2024 and sell it today you would earn a total of  804.00  from holding Spire Global or generate 96.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Mistras Group  vs.  Spire Global

Mistras Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mistras Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Spire Global

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Spire Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mistras and Spire Global

The main advantage of trading using opposite Mistras and Spire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras 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.

The idea behind Mistras Group and Spire Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.