Correlation Between Relx PLC and Adyen NV

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

By analyzing existing cross correlation between Relx PLC and Adyen NV, you can compare the effects of market volatilities on Relx PLC and Adyen NV 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 Relx PLC with a short position of Adyen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relx PLC and Adyen NV.

Diversification Opportunities for Relx PLC and Adyen NV

0.35

Correlation Coefficient

Relx PLC  Adyen NV

Weak diversification

The 3 months correlation between Relx and Adyen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Relx PLC and Adyen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adyen NV and Relx 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 Relx PLC are associated (or correlated) with Adyen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adyen NV has no effect on the direction of Relx PLC i.e., Relx PLC and Adyen NV go up and down completely randomly.

Pair Corralation between Relx PLC and Adyen NV

Assuming the 90 days trading horizon Relx PLC is expected to generate 173.6 times less return on investment than Adyen NV. But when comparing it to its historical volatility, Relx PLC is 2.16 times less risky than Adyen NV. It trades about 0.0 of its potential returns per unit of risk. Adyen NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  141,500  in Adyen NV on April 22, 2025 and sell it today you would earn a total of  14,700  from holding Adyen NV or generate 10.39% return on investment over 90 days.

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

Relx PLC  vs.  Adyen NV

Relx PLC

Risk-Adjusted Performance

Weak

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

Adyen NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Adyen NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Adyen NV may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Relx PLC and Adyen NV

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

The idea behind Relx PLC and Adyen NV 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.