Correlation Between Global Payments and RB Global
Can any of the company-specific risk be diversified away by investing in both Global Payments and RB Global 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 RB Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Payments and RB Global, you can compare the effects of market volatilities on Global Payments and RB Global 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 RB Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Payments and RB Global.
Diversification Opportunities for Global Payments and RB Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and RBA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global Payments and RB Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB Global 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 RB Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB Global has no effect on the direction of Global Payments i.e., Global Payments and RB Global go up and down completely randomly.
Pair Corralation between Global Payments and RB Global
Considering the 90-day investment horizon Global Payments is expected to generate 7.42 times less return on investment than RB Global. In addition to that, Global Payments is 1.02 times more volatile than RB Global. It trades about 0.01 of its total potential returns per unit of risk. RB Global is currently generating about 0.1 per unit of volatility. If you would invest 6,157 in RB Global on August 25, 2024 and sell it today you would earn a total of 3,606 from holding RB Global or generate 58.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Global Payments vs. RB Global
Performance |
Timeline |
Global Payments |
RB Global |
Global Payments and RB Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Payments and RB Global
The main advantage of trading using opposite Global Payments and RB Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Payments position performs unexpectedly, RB Global 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 RB Global will offset losses from the drop in RB Global'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 |
RB Global vs. First Advantage Corp | RB Global vs. Civeo Corp | RB Global vs. Performant Financial | RB Global vs. Network 1 Technologies |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |