Correlation Between SPEAR Investments and Ferrovial

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

By analyzing existing cross correlation between SPEAR Investments I and Ferrovial SE, you can compare the effects of market volatilities on SPEAR Investments and Ferrovial 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 SPEAR Investments with a short position of Ferrovial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPEAR Investments and Ferrovial.

Diversification Opportunities for SPEAR Investments and Ferrovial

-0.64

Correlation Coefficient

SPEAR Investments  Ferrovial

Excellent diversification

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

Pair Corralation between SPEAR Investments and Ferrovial

Assuming the 90 days trading horizon SPEAR Investments I is expected to under-perform the Ferrovial. But the stock apears to be less risky and, when comparing its historical volatility, SPEAR Investments I is 1.01 times less risky than Ferrovial. The stock trades about -0.16 of its potential returns per unit of risk. The Ferrovial SE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,998  in Ferrovial SE on April 20, 2025 and sell it today you would earn a total of  537.00  from holding Ferrovial SE or generate 13.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SPEAR Investments I  vs.  Ferrovial SE

SPEAR Investments

Risk-Adjusted Performance

Very Weak

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

Ferrovial SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ferrovial SE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ferrovial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPEAR Investments and Ferrovial

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

The idea behind SPEAR Investments I and Ferrovial SE 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.