Correlation Between Global Engine and Data Storage

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

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

Diversification Opportunities for Global Engine and Data Storage

0.78

Correlation Coefficient

Global Engine  Data Storage

Poor diversification

The 3 months correlation between Global and Data is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Global Engine Group and Data Storage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Storage Corp and Global Engine 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 Global Engine Group are associated (or correlated) with Data Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Storage Corp has no effect on the direction of Global Engine i.e., Global Engine and Data Storage go up and down completely randomly.

Pair Corralation between Global Engine and Data Storage

Considering the 90-day investment horizon Global Engine Group is expected to generate 1.22 times more return on investment than Data Storage. However, Global Engine is 1.22 times more volatile than Data Storage Corp. It trades about 0.13 of its potential returns per unit of risk. Data Storage Corp is currently generating about 0.09 per unit of risk. If you would invest  188.00  in Global Engine Group on April 30, 2025 and sell it today you would earn a total of  109.00  from holding Global Engine Group or generate 57.98% return on investment over 90 days.

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

Global Engine Group  vs.  Data Storage Corp

Global Engine Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Engine Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Global Engine exhibited solid returns over the last few months and may actually be approaching a breakup point.

Data Storage Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Data Storage Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Data Storage unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Engine and Data Storage

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

The idea behind Global Engine Group and Data Storage Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.