Correlation Between Global Payments and Elis SA
Can any of the company-specific risk be diversified away by investing in both Global Payments and Elis SA 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 Global Payments and Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Payments and Elis SA, you can compare the effects of market volatilities on Global Payments and Elis SA 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 Global Payments with a short position of Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Payments and Elis SA.
Diversification Opportunities for Global Payments and Elis SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Elis is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Payments and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA and Global Payments 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 Global Payments are associated (or correlated) with Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of Global Payments i.e., Global Payments and Elis SA go up and down completely randomly.
Pair Corralation between Global Payments and Elis SA
If you would invest 10,515 in Global Payments on September 3, 2024 and sell it today you would earn a total of 1,381 from holding Global Payments or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Global Payments vs. Elis SA
Performance |
| Timeline |
| Global Payments |
| Elis SA |
Global Payments and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Payments and Elis SA
The main advantage of trading using opposite Global Payments and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Payments position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.| Global Payments vs. Copart Inc | Global Payments vs. ABM Industries Incorporated | Global Payments vs. Thomson Reuters Corp | Global Payments vs. Aramark Holdings |
| Elis SA vs. Maximus | Elis SA vs. Network 1 Technologies | Elis SA vs. First Advantage Corp | Elis SA vs. BrightView Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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