Correlation Between Spotify Technology and Gen Digital

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

By analyzing existing cross correlation between Spotify Technology SA and Gen Digital, you can compare the effects of market volatilities on Spotify Technology and Gen Digital 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 Spotify Technology with a short position of Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Gen Digital.

Diversification Opportunities for Spotify Technology and Gen Digital

-0.16

Correlation Coefficient

Spotify Technology  Gen Digital

Good diversification

The 3 months correlation between Spotify and Gen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of Spotify Technology i.e., Spotify Technology and Gen Digital go up and down completely randomly.

Pair Corralation between Spotify Technology and Gen Digital

Given the investment horizon of 90 days Spotify Technology SA is expected to under-perform the Gen Digital. In addition to that, Spotify Technology is 1.6 times more volatile than Gen Digital. It trades about -0.04 of its total potential returns per unit of risk. Gen Digital is currently generating about 0.0 per unit of volatility. If you would invest  2,916  in Gen Digital on June 27, 2025 and sell it today you would lose (21.00) from holding Gen Digital or give up 0.72% of portfolio value over 90 days.

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

Spotify Technology SA  vs.  Gen Digital

Spotify Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Spotify Technology SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Gen Digital

Risk-Adjusted Performance

Weakest

Over the last 90 days Gen Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Gen Digital is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Spotify Technology and Gen Digital

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

The idea behind Spotify Technology SA and Gen Digital 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.