Correlation Between Relx PLC and Azerion Group

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

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

Diversification Opportunities for Relx PLC and Azerion Group

0.72

Correlation Coefficient

Relx PLC  Azerion Group

Poor diversification

The 3 months correlation between Relx and Azerion is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Relx PLC and Azerion Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azerion Group 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 Azerion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azerion Group NV has no effect on the direction of Relx PLC i.e., Relx PLC and Azerion Group go up and down completely randomly.

Pair Corralation between Relx PLC and Azerion Group

Assuming the 90 days trading horizon Relx PLC is expected to generate 0.45 times more return on investment than Azerion Group. However, Relx PLC is 2.24 times less risky than Azerion Group. It trades about -0.04 of its potential returns per unit of risk. Azerion Group NV is currently generating about -0.14 per unit of risk. If you would invest  4,599  in Relx PLC on April 24, 2025 and sell it today you would lose (127.00) from holding Relx PLC or give up 2.76% of portfolio value over 90 days.

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

Relx PLC  vs.  Azerion Group NV

Relx PLC

Risk-Adjusted Performance

Very 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.

Azerion Group NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Azerion Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Relx PLC and Azerion Group

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

The idea behind Relx PLC and Azerion Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.