Correlation Between Admiral Group and GlobalData PLC

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

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

Diversification Opportunities for Admiral Group and GlobalData PLC

-0.54

Correlation Coefficient

Admiral Group  GlobalData PLC

Excellent diversification

The 3 months correlation between Admiral and GlobalData is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Admiral Group PLC and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC and Admiral Group 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 Admiral Group PLC 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 Admiral Group i.e., Admiral Group and GlobalData PLC go up and down completely randomly.

Pair Corralation between Admiral Group and GlobalData PLC

Assuming the 90 days trading horizon Admiral Group PLC is expected to generate 0.54 times more return on investment than GlobalData PLC. However, Admiral Group PLC is 1.87 times less risky than GlobalData PLC. It trades about 0.15 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.11 per unit of risk. If you would invest  261,800  in Admiral Group PLC on December 25, 2024 and sell it today you would earn a total of  30,700  from holding Admiral Group PLC or generate 11.73% return on investment over 90 days.

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

Admiral Group PLC  vs.  GlobalData PLC

Admiral Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Admiral Group PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Admiral Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GlobalData PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days GlobalData PLC 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Admiral Group and GlobalData PLC

The main advantage of trading using opposite Admiral Group and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Admiral Group 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 Admiral Group PLC 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.