Correlation Between Spire Global and ClearVue Technologies

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

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

Diversification Opportunities for Spire Global and ClearVue Technologies

-0.16

Correlation Coefficient

Spire Global  ClearVue Technologies

Good diversification

The 3 months correlation between Spire and ClearVue is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and ClearVue Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearVue Technologies and Spire Global 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 Global are associated (or correlated) with ClearVue Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearVue Technologies has no effect on the direction of Spire Global i.e., Spire Global and ClearVue Technologies go up and down completely randomly.

Pair Corralation between Spire Global and ClearVue Technologies

Given the investment horizon of 90 days Spire Global is expected to generate 13.5 times less return on investment than ClearVue Technologies. But when comparing it to its historical volatility, Spire Global is 29.26 times less risky than ClearVue Technologies. It trades about 0.25 of its potential returns per unit of risk. ClearVue Technologies Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  29.00  in ClearVue Technologies Limited on September 9, 2024 and sell it today you would lose (11.00) from holding ClearVue Technologies Limited or give up 37.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Spire Global  vs.  ClearVue Technologies Limited

Spire Global

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 19 (%) 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.

ClearVue Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ClearVue Technologies Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, ClearVue Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spire Global and ClearVue Technologies

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

The idea behind Spire Global and ClearVue Technologies Limited 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.