Correlation Between Temple Bar and Datagroup

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

By analyzing existing cross correlation between Temple Bar Investment and Datagroup SE, you can compare the effects of market volatilities on Temple Bar and Datagroup 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 Temple Bar with a short position of Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Temple Bar and Datagroup.

Diversification Opportunities for Temple Bar and Datagroup

0.85

Correlation Coefficient

Temple Bar  Datagroup

Very poor diversification

The 3 months correlation between Temple and Datagroup is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Temple Bar Investment and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE and Temple Bar 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 Temple Bar Investment are associated (or correlated) with Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of Temple Bar i.e., Temple Bar and Datagroup go up and down completely randomly.

Pair Corralation between Temple Bar and Datagroup

Assuming the 90 days trading horizon Temple Bar Investment is expected to generate 0.6 times more return on investment than Datagroup. However, Temple Bar Investment is 1.66 times less risky than Datagroup. It trades about 0.41 of its potential returns per unit of risk. Datagroup SE is currently generating about 0.18 per unit of risk. If you would invest  28,802  in Temple Bar Investment on April 24, 2025 and sell it today you would earn a total of  4,548  from holding Temple Bar Investment or generate 15.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

Temple Bar Investment  vs.  Datagroup SE

Temple Bar Investment

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Temple Bar Investment are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Temple Bar unveiled solid returns over the last few months and may actually be approaching a breakup point.

Datagroup SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datagroup SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Datagroup may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Temple Bar and Datagroup

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

The idea behind Temple Bar Investment and Datagroup SE 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 Anywhere module to track or share privately all of your investments from the convenience of any device.