Correlation Between GlobalData PLC and Dotdigital Group
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC and Dotdigital Group 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 Dotdigital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Dotdigital Group Plc, you can compare the effects of market volatilities on GlobalData PLC and Dotdigital Group 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 Dotdigital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Dotdigital Group.
Diversification Opportunities for GlobalData PLC and Dotdigital Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlobalData and Dotdigital is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and Dotdigital Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dotdigital Group Plc 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 Dotdigital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dotdigital Group Plc has no effect on the direction of GlobalData PLC i.e., GlobalData PLC and Dotdigital Group go up and down completely randomly.
Pair Corralation between GlobalData PLC and Dotdigital Group
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the Dotdigital Group. But the stock apears to be less risky and, when comparing its historical volatility, GlobalData PLC is 1.25 times less risky than Dotdigital Group. The stock trades about -0.23 of its potential returns per unit of risk. The Dotdigital Group Plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,399 in Dotdigital Group Plc on November 3, 2024 and sell it today you would earn a total of 271.00 from holding Dotdigital Group Plc or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalData PLC vs. Dotdigital Group Plc
Performance |
| Timeline |
| GlobalData PLC |
| Dotdigital Group Plc |
GlobalData PLC and Dotdigital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Dotdigital Group
The main advantage of trading using opposite GlobalData PLC and Dotdigital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC position performs unexpectedly, Dotdigital Group 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 Dotdigital Group will offset losses from the drop in Dotdigital Group's long position.| GlobalData PLC vs. Lowland Investment Co | GlobalData PLC vs. OneSavings Bank PLC | GlobalData PLC vs. European Metals Holdings | GlobalData PLC vs. BlackRock Frontiers Investment |
| Dotdigital Group vs. Toyota Motor Corp | Dotdigital Group vs. SoftBank Group Corp | Dotdigital Group vs. Halyk Bank of | Dotdigital Group vs. Samsung Electronics Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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