Correlation Between Relx PLC and Network 1

Can any of the company-specific risk be diversified away by investing in both Relx PLC and Network 1 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 Relx PLC and Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Relx PLC ADR and Network 1 Technologies, you can compare the effects of market volatilities on Relx PLC and Network 1 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 Relx PLC with a short position of Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relx PLC and Network 1.

Diversification Opportunities for Relx PLC and Network 1

-0.61

Correlation Coefficient

Relx PLC  Network 1

Excellent diversification

The 3 months correlation between Relx and Network is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Relx PLC ADR and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies and Relx 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 Relx PLC ADR are associated (or correlated) with Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Relx PLC i.e., Relx PLC and Network 1 go up and down completely randomly.

Pair Corralation between Relx PLC and Network 1

Given the investment horizon of 90 days Relx PLC ADR is expected to under-perform the Network 1. But the stock apears to be less risky and, when comparing its historical volatility, Relx PLC ADR is 2.11 times less risky than Network 1. The stock trades about -0.14 of its potential returns per unit of risk. The Network 1 Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Network 1 Technologies on May 14, 2025 and sell it today you would earn a total of  18.00  from holding Network 1 Technologies or generate 14.52% return on investment over 90 days.

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

Relx PLC ADR  vs.  Network 1 Technologies

Relx PLC ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Relx PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Network 1 Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Relx PLC and Network 1

The main advantage of trading using opposite Relx PLC and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relx PLC position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind Relx PLC ADR and Network 1 Technologies 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.