Correlation Between Ralph Lauren and Global Payment

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

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

Diversification Opportunities for Ralph Lauren and Global Payment

0.0

Correlation Coefficient

Ralph Lauren  Global Payment

Pay attention - limited upside

The 3 months correlation between Ralph and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ralph Lauren Corp and Global Payment Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payment Techn and Ralph Lauren 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 Ralph Lauren Corp are associated (or correlated) with Global Payment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payment Techn has no effect on the direction of Ralph Lauren i.e., Ralph Lauren and Global Payment go up and down completely randomly.

Pair Corralation between Ralph Lauren and Global Payment

If you would invest  17,315  in Ralph Lauren Corp on September 3, 2024 and sell it today you would earn a total of  5,825  from holding Ralph Lauren Corp or generate 33.64% return on investment over 90 days.

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

Ralph Lauren Corp  vs.  Global Payment Technologies

Ralph Lauren Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ralph Lauren Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Ralph Lauren disclosed solid returns over the last few months and may actually be approaching a breakup point.

Global Payment Techn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Payment Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Global Payment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ralph Lauren and Global Payment

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

The idea behind Ralph Lauren Corp and Global Payment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .