Correlation Between Spire Global and PT Sari

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

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

Diversification Opportunities for Spire Global and PT Sari

0.58

Correlation Coefficient

Spire Global  PT Sari

Very weak diversification

The 3 months correlation between Spire and RAFI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and PT Sari Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sari Kreasi 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 PT Sari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sari Kreasi has no effect on the direction of Spire Global i.e., Spire Global and PT Sari go up and down completely randomly.

Pair Corralation between Spire Global and PT Sari

Given the investment horizon of 90 days Spire Global is expected to generate 0.86 times more return on investment than PT Sari. However, Spire Global is 1.16 times less risky than PT Sari. It trades about 0.17 of its potential returns per unit of risk. PT Sari Kreasi is currently generating about 0.08 per unit of risk. If you would invest  930.00  in Spire Global on September 13, 2024 and sell it today you would earn a total of  451.00  from holding Spire Global or generate 48.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Spire Global  vs.  PT Sari Kreasi

Spire Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 13 (%) 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.

PT Sari Kreasi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Sari Kreasi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Sari disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spire Global and PT Sari

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

The idea behind Spire Global and PT Sari Kreasi 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.