Correlation Between Glanbia PLC and FD Technologies
Can any of the company-specific risk be diversified away by investing in both Glanbia PLC and FD Technologies 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 Glanbia PLC and FD Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glanbia PLC and FD Technologies PLC, you can compare the effects of market volatilities on Glanbia PLC and FD Technologies 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 Glanbia PLC with a short position of FD Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glanbia PLC and FD Technologies.
Diversification Opportunities for Glanbia PLC and FD Technologies
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Glanbia and GYQ is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Glanbia PLC and FD Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FD Technologies PLC and Glanbia 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 Glanbia PLC are associated (or correlated) with FD Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FD Technologies PLC has no effect on the direction of Glanbia PLC i.e., Glanbia PLC and FD Technologies go up and down completely randomly.
Pair Corralation between Glanbia PLC and FD Technologies
Assuming the 90 days trading horizon Glanbia PLC is expected to under-perform the FD Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Glanbia PLC is 1.32 times less risky than FD Technologies. The stock trades about -0.08 of its potential returns per unit of risk. The FD Technologies PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,920 in FD Technologies PLC on September 1, 2024 and sell it today you would earn a total of 220.00 from holding FD Technologies PLC or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glanbia PLC vs. FD Technologies PLC
Performance |
| Timeline |
| Glanbia PLC |
| FD Technologies PLC |
Glanbia PLC and FD Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glanbia PLC and FD Technologies
The main advantage of trading using opposite Glanbia PLC and FD Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glanbia PLC position performs unexpectedly, FD Technologies 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 FD Technologies will offset losses from the drop in FD Technologies' long position.| Glanbia PLC vs. Kerry Group | Glanbia PLC vs. Kingspan Group plc | Glanbia PLC vs. Bank of Ireland | Glanbia PLC vs. Dalata Hotel Group |
| FD Technologies vs. Dalata Hotel Group | FD Technologies vs. Uniphar Group PLC | FD Technologies vs. KLP Aksje Fremvoksende | FD Technologies vs. Origin Enterprises Plc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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