Correlation Between Spire Global and Helios Towers

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

By analyzing existing cross correlation between Spire Global and Helios Towers Plc, you can compare the effects of market volatilities on Spire Global and Helios Towers 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 Helios Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Helios Towers.

Diversification Opportunities for Spire Global and Helios Towers

-0.86

Correlation Coefficient

Spire Global  Helios Towers

Pay attention - limited upside

The 3 months correlation between Spire and Helios is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Helios Towers Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Towers Plc 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 Helios Towers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Towers Plc has no effect on the direction of Spire Global i.e., Spire Global and Helios Towers go up and down completely randomly.

Pair Corralation between Spire Global and Helios Towers

Given the investment horizon of 90 days Spire Global is expected to generate 2.34 times more return on investment than Helios Towers. However, Spire Global is 2.34 times more volatile than Helios Towers Plc. It trades about 0.05 of its potential returns per unit of risk. Helios Towers Plc is currently generating about 0.01 per unit of risk. If you would invest  960.00  in Spire Global on September 5, 2024 and sell it today you would earn a total of  517.00  from holding Spire Global or generate 53.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.4%
Values	Daily Returns

Spire Global  vs.  Helios Towers Plc

Spire Global

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 18 (%) 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.

Helios Towers Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helios Towers Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Spire Global and Helios Towers

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

The idea behind Spire Global and Helios Towers Plc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.