Correlation Between SpringBig Holdings and WM Technology

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

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

Diversification Opportunities for SpringBig Holdings and WM Technology

0.09

Correlation Coefficient

SpringBig Holdings  WM Technology

Significant diversification

The 3 months correlation between SpringBig and MAPSW is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SpringBig Holdings and WM Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WM Technology and SpringBig Holdings 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 SpringBig Holdings are associated (or correlated) with WM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WM Technology has no effect on the direction of SpringBig Holdings i.e., SpringBig Holdings and WM Technology go up and down completely randomly.

Pair Corralation between SpringBig Holdings and WM Technology

If you would invest  3.58  in WM Technology on September 14, 2024 and sell it today you would lose (0.92) from holding WM Technology or give up 25.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

SpringBig Holdings  vs.  WM Technology

SpringBig Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SpringBig Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, SpringBig Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WM Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WM Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, WM Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SpringBig Holdings and WM Technology

The main advantage of trading using opposite SpringBig Holdings and WM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpringBig Holdings position performs unexpectedly, WM Technology 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 WM Technology will offset losses from the drop in WM Technology's long position.

The idea behind SpringBig Holdings and WM Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.