Correlation Between Glanbia PLC and Datalex

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

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

Diversification Opportunities for Glanbia PLC and Datalex

0.12

Correlation Coefficient

Glanbia PLC  Datalex

Average diversification

The 3 months correlation between Glanbia and Datalex is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Glanbia PLC and Datalex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datalex and Glanbia 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 Glanbia PLC are associated (or correlated) with Datalex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datalex has no effect on the direction of Glanbia PLC i.e., Glanbia PLC and Datalex go up and down completely randomly.

Pair Corralation between Glanbia PLC and Datalex

Assuming the 90 days trading horizon Glanbia PLC is expected to under-perform the Datalex. But the stock apears to be less risky and, when comparing its historical volatility, Glanbia PLC is 1.09 times less risky than Datalex. The stock trades about -0.1 of its potential returns per unit of risk. The Datalex is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Datalex on December 28, 2024 and sell it today you would earn a total of  5.00  from holding Datalex or generate 14.29% return on investment over 90 days.

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

Glanbia PLC  vs.  Datalex

Glanbia PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glanbia PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Datalex

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Datalex are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Datalex reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glanbia PLC and Datalex

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

The idea behind Glanbia PLC and Datalex 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.