Correlation Between GlobalData PLC and Fortune Brands

Can any of the company-specific risk be diversified away by investing in both GlobalData PLC and Fortune Brands 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 Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GlobalData PLC and Fortune Brands Home, you can compare the effects of market volatilities on GlobalData PLC and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Fortune Brands.

Diversification Opportunities for GlobalData PLC and Fortune Brands

-0.25

Correlation Coefficient

GlobalData PLC  Fortune Brands

Very good diversification

The 3 months correlation between GlobalData and Fortune is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of GlobalData PLC i.e., GlobalData PLC and Fortune Brands go up and down completely randomly.

Pair Corralation between GlobalData PLC and Fortune Brands

Assuming the 90 days trading horizon GlobalData PLC is expected to generate 1.49 times more return on investment than Fortune Brands. However, GlobalData PLC is 1.49 times more volatile than Fortune Brands Home. It trades about 0.03 of its potential returns per unit of risk. Fortune Brands Home is currently generating about 0.01 per unit of risk. If you would invest  13,800  in GlobalData PLC on April 20, 2025 and sell it today you would earn a total of  200.00  from holding GlobalData PLC or generate 1.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.19%
Values	Daily Returns

GlobalData PLC  vs.  Fortune Brands Home

GlobalData PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GlobalData PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GlobalData PLC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fortune Brands Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortune Brands Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fortune Brands is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GlobalData PLC and Fortune Brands

The main advantage of trading using opposite GlobalData PLC and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.

The idea behind GlobalData PLC and Fortune Brands Home pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.