Correlation Between Twitter and SP Global

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Can any of the company-specific risk be diversified away by investing in both Twitter and SP Global 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 Twitter and SP Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and SP Global, you can compare the effects of market volatilities on Twitter and SP Global 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 Twitter with a short position of SP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and SP Global.

Diversification Opportunities for Twitter and SP Global

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Twitter and SPGI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global and Twitter 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 Twitter are associated (or correlated) with SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of Twitter i.e., Twitter and SP Global go up and down completely randomly.

Pair Corralation between Twitter and SP Global

If you would invest  34,327  in SP Global on December 30, 2023 and sell it today you would earn a total of  8,218  from holding SP Global or generate 23.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy0.4%
ValuesDaily Returns

Twitter  vs.  SP Global

 Performance 
       Timeline  
Twitter 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Twitter is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
SP Global 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days SP Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, SP Global is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Twitter and SP Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Twitter and SP Global

The main advantage of trading using opposite Twitter and SP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, SP Global 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 SP Global will offset losses from the drop in SP Global's long position.
The idea behind Twitter and SP Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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