Correlation Between Real Estate and GlobalData PLC

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

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

Diversification Opportunities for Real Estate and GlobalData PLC

0.04

Correlation Coefficient

Real Estate  GlobalData PLC

Significant diversification

The 3 months correlation between Real and GlobalData is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Investors and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC and Real Estate 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 Real Estate Investors are associated (or correlated) with GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Real Estate i.e., Real Estate and GlobalData PLC go up and down completely randomly.

Pair Corralation between Real Estate and GlobalData PLC

Assuming the 90 days trading horizon Real Estate Investors is expected to generate 0.19 times more return on investment than GlobalData PLC. However, Real Estate Investors is 5.2 times less risky than GlobalData PLC. It trades about 0.17 of its potential returns per unit of risk. GlobalData PLC is currently generating about 0.02 per unit of risk. If you would invest  2,913  in Real Estate Investors on April 25, 2025 and sell it today you would earn a total of  287.00  from holding Real Estate Investors or generate 9.85% return on investment over 90 days.

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

Real Estate Investors  vs.  GlobalData PLC

Real Estate Investors

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Real Estate Investors are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Real Estate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

GlobalData PLC

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GlobalData PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, GlobalData PLC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Real Estate and GlobalData PLC

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

The idea behind Real Estate Investors and GlobalData 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.