Correlation Between SP Global and Twitter
Can any of the company-specific risk be diversified away by investing in both SP Global and Twitter 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 SP Global and Twitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and Twitter, you can compare the effects of market volatilities on SP Global and Twitter 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 SP Global with a short position of Twitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and Twitter.
Diversification Opportunities for SP Global and Twitter
Very good diversification
The 3 months correlation between SPGI and Twitter is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter and SP 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 SP Global are associated (or correlated) with Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of SP Global i.e., SP Global and Twitter go up and down completely randomly.
Pair Corralation between SP Global and Twitter
If you would invest 36,194 in SP Global on January 25, 2024 and sell it today you would earn a total of 5,132 from holding SP Global or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
SP Global vs. Twitter
Performance |
| Timeline |
| SP Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SP Global and Twitter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and Twitter
The main advantage of trading using opposite SP Global and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.| SP Global vs. Dun Bradstreet Holdings | SP Global vs. Moodys | SP Global vs. MSCI Inc | SP Global vs. Intercontinental Exchange |
| Twitter vs. Mid Atlantic Home Health | Twitter vs. Planet Fitness | Twitter vs. JBG SMITH Properties | Twitter vs. Bassett Furniture Industries |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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