Correlation Between Spire Global and High Yield
Can any of the company-specific risk be diversified away by investing in both Spire Global and High Yield 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 High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and High Yield Bond, you can compare the effects of market volatilities on Spire Global and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and High Yield.
Diversification Opportunities for Spire Global and High Yield
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Spire and High is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and High Yield Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Bond 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Bond has no effect on the direction of Spire Global i.e., Spire Global and High Yield go up and down completely randomly.
Pair Corralation between Spire Global and High Yield
Given the investment horizon of 90 days Spire Global is expected to generate 25.5 times more return on investment than High Yield. However, Spire Global is 25.5 times more volatile than High Yield Bond. It trades about 0.32 of its potential returns per unit of risk. High Yield Bond is currently generating about 0.19 per unit of risk. If you would invest 1,080 in Spire Global on September 6, 2024 and sell it today you would earn a total of 418.00 from holding Spire Global or generate 38.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Spire Global vs. High Yield Bond
Performance |
Timeline |
Spire Global |
High Yield Bond |
Spire Global and High Yield Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Spire Global and High Yield
The main advantage of trading using opposite Spire Global and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.Spire Global vs. Lichen China Limited | Spire Global vs. Unifirst | Spire Global vs. First Advantage Corp | Spire Global vs. Performant Financial |
High Yield vs. High Yield Bond | High Yield vs. Artisan High Income | High Yield vs. Tcw High Yield | High Yield vs. High Yield Strategy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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