Correlation Between Global Payments and Team
Can any of the company-specific risk be diversified away by investing in both Global Payments and Team 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 Team into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Payments and Team Inc, you can compare the effects of market volatilities on Global Payments and Team 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 Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Payments and Team.
Diversification Opportunities for Global Payments and Team
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Team is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global Payments and Team Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Inc 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 Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Inc has no effect on the direction of Global Payments i.e., Global Payments and Team go up and down completely randomly.
Pair Corralation between Global Payments and Team
Considering the 90-day investment horizon Global Payments is expected to generate 21.21 times less return on investment than Team. But when comparing it to its historical volatility, Global Payments is 2.99 times less risky than Team. It trades about 0.04 of its potential returns per unit of risk. Team Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Team Inc on November 3, 2024 and sell it today you would earn a total of 311.00 from holding Team Inc or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Payments vs. Team Inc
Performance |
| Timeline |
| Global Payments |
| Team Inc |
Global Payments and Team Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Payments and Team
The main advantage of trading using opposite Global Payments and Team positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Payments position performs unexpectedly, Team 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 Team will offset losses from the drop in Team'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 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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