Correlation Between GlobalData PLC and Centaur Media
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC and Centaur Media 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 Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Centaur Media, you can compare the effects of market volatilities on GlobalData PLC and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Centaur Media.
Diversification Opportunities for GlobalData PLC and Centaur Media
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlobalData and Centaur is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of GlobalData PLC i.e., GlobalData PLC and Centaur Media go up and down completely randomly.
Pair Corralation between GlobalData PLC and Centaur Media
Assuming the 90 days trading horizon GlobalData PLC is expected to generate 1.41 times more return on investment than Centaur Media. However, GlobalData PLC is 1.41 times more volatile than Centaur Media. It trades about 0.25 of its potential returns per unit of risk. Centaur Media is currently generating about 0.2 per unit of risk. If you would invest 19,000 in GlobalData PLC on October 11, 2024 and sell it today you would earn a total of 1,500 from holding GlobalData PLC or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalData PLC vs. Centaur Media
Performance |
| Timeline |
| GlobalData PLC |
| Centaur Media |
GlobalData PLC and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Centaur Media
The main advantage of trading using opposite GlobalData PLC and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| GlobalData PLC vs. Target Healthcare REIT | GlobalData PLC vs. Abingdon Health Plc | GlobalData PLC vs. PureTech Health plc | GlobalData PLC vs. HCA Healthcare |
| Centaur Media vs. GlobalData PLC | Centaur Media vs. JD Sports Fashion | Centaur Media vs. Fonix Mobile plc | Centaur Media vs. Extra Space Storage |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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