Correlation Between GlobalData PLC and Alternative Liquidity
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC and Alternative Liquidity 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 GlobalData PLC and Alternative Liquidity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Alternative Liquidity, you can compare the effects of market volatilities on GlobalData PLC and Alternative Liquidity 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 GlobalData PLC with a short position of Alternative Liquidity. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Alternative Liquidity.
Diversification Opportunities for GlobalData PLC and Alternative Liquidity
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlobalData and Alternative is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and Alternative Liquidity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Liquidity and GlobalData PLC 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 GlobalData PLC are associated (or correlated) with Alternative Liquidity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Liquidity has no effect on the direction of GlobalData PLC i.e., GlobalData PLC and Alternative Liquidity go up and down completely randomly.
Pair Corralation between GlobalData PLC and Alternative Liquidity
Assuming the 90 days trading horizon GlobalData PLC is expected to generate 1.55 times less return on investment than Alternative Liquidity. But when comparing it to its historical volatility, GlobalData PLC is 2.24 times less risky than Alternative Liquidity. It trades about 0.05 of its potential returns per unit of risk. Alternative Liquidity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Alternative Liquidity on September 14, 2024 and sell it today you would earn a total of 0.50 from holding Alternative Liquidity or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalData PLC vs. Alternative Liquidity
Performance |
| Timeline |
| GlobalData PLC |
| Alternative Liquidity |
GlobalData PLC and Alternative Liquidity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Alternative Liquidity
The main advantage of trading using opposite GlobalData PLC and Alternative Liquidity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC position performs unexpectedly, Alternative Liquidity 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 Alternative Liquidity will offset losses from the drop in Alternative Liquidity's long position.| GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Hyundai Motor | GlobalData PLC vs. Toyota Motor Corp |
| Alternative Liquidity vs. Flow Traders NV | Alternative Liquidity vs. Waste Management | Alternative Liquidity vs. GlobalData PLC | Alternative Liquidity vs. Ion Beam Applications |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |