Correlation Between CAP LEASE and GlobalData PLC

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

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

Diversification Opportunities for CAP LEASE and GlobalData PLC

-0.27

Correlation Coefficient

CAP LEASE  GlobalData PLC

Very good diversification

The 3 months correlation between CAP and GlobalData is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC and CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and GlobalData PLC go up and down completely randomly.

Pair Corralation between CAP LEASE and GlobalData PLC

Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 1.85 times more return on investment than GlobalData PLC. However, CAP LEASE is 1.85 times more volatile than GlobalData PLC. It trades about 0.2 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.03 per unit of risk. If you would invest  33.00  in CAP LEASE AVIATION on July 4, 2025 and sell it today you would earn a total of  22.00  from holding CAP LEASE AVIATION or generate 66.67% return on investment over 90 days.

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

CAP LEASE AVIATION  vs.  GlobalData PLC

CAP LEASE AVIATION

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CAP LEASE AVIATION are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, CAP LEASE exhibited solid returns over the last few months and may actually be approaching a breakup point.

GlobalData PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days GlobalData PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GlobalData PLC is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CAP LEASE and GlobalData PLC

The main advantage of trading using opposite CAP LEASE and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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 CAP LEASE AVIATION 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.