Correlation Between GlobalData PLC and LBG Media

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

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

Diversification Opportunities for GlobalData PLC and LBG Media

-0.71

Correlation Coefficient

GlobalData PLC  LBG Media

Pay attention - limited upside

The 3 months correlation between GlobalData and LBG is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of GlobalData PLC i.e., GlobalData PLC and LBG Media go up and down completely randomly.

Pair Corralation between GlobalData PLC and LBG Media

Assuming the 90 days trading horizon GlobalData PLC is expected to generate 1.11 times less return on investment than LBG Media. In addition to that, GlobalData PLC is 1.42 times more volatile than LBG Media PLC. It trades about 0.03 of its total potential returns per unit of risk. LBG Media PLC is currently generating about 0.04 per unit of volatility. If you would invest  9,660  in LBG Media PLC on April 22, 2025 and sell it today you would earn a total of  490.00  from holding LBG Media PLC or generate 5.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GlobalData PLC  vs.  LBG Media PLC

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.

LBG Media PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LBG Media PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, LBG Media may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with GlobalData PLC and LBG Media

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

The idea behind GlobalData PLC and LBG Media PLC 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.