Correlation Between Alphabet and Barclays PLC

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

By analyzing existing cross correlation between Alphabet Inc Class C and Barclays PLC ADR, you can compare the effects of market volatilities on Alphabet and Barclays PLC 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 Alphabet with a short position of Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Barclays PLC.

Diversification Opportunities for Alphabet and Barclays PLC

0.12

Correlation Coefficient

Alphabet  Barclays PLC

Average diversification

The 3 months correlation between Alphabet and Barclays is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Barclays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC ADR and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC ADR has no effect on the direction of Alphabet i.e., Alphabet and Barclays PLC go up and down completely randomly.

Pair Corralation between Alphabet and Barclays PLC

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Barclays PLC. In addition to that, Alphabet is 1.3 times more volatile than Barclays PLC ADR. It trades about -0.09 of its total potential returns per unit of risk. Barclays PLC ADR is currently generating about 0.42 per unit of volatility. If you would invest  1,427  in Barclays PLC ADR on February 11, 2025 and sell it today you would earn a total of  226.00  from holding Barclays PLC ADR or generate 15.84% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Barclays PLC ADR

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Barclays PLC ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Barclays PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphabet and Barclays PLC

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

The idea behind Alphabet Inc Class C and Barclays PLC ADR 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..