Correlation Between Globant SA and Applied Digital
Can any of the company-specific risk be diversified away by investing in both Globant SA and Applied Digital 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 Globant SA and Applied Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globant SA and Applied Digital, you can compare the effects of market volatilities on Globant SA and Applied Digital 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 Globant SA with a short position of Applied Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globant SA and Applied Digital.
Diversification Opportunities for Globant SA and Applied Digital
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Globant and Applied is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Globant SA and Applied Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Digital and Globant SA 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 Globant SA are associated (or correlated) with Applied Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Digital has no effect on the direction of Globant SA i.e., Globant SA and Applied Digital go up and down completely randomly.
Pair Corralation between Globant SA and Applied Digital
Given the investment horizon of 90 days Globant SA is expected to under-perform the Applied Digital. But the stock apears to be less risky and, when comparing its historical volatility, Globant SA is 2.04 times less risky than Applied Digital. The stock trades about -0.18 of its potential returns per unit of risk. The Applied Digital is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,325 in Applied Digital on June 4, 2025 and sell it today you would earn a total of 273.00 from holding Applied Digital or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globant SA vs. Applied Digital
Performance |
| Timeline |
| Globant SA |
| Applied Digital |
Globant SA and Applied Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globant SA and Applied Digital
The main advantage of trading using opposite Globant SA and Applied Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globant SA position performs unexpectedly, Applied Digital 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 Applied Digital will offset losses from the drop in Applied Digital's long position.| Globant SA vs. EPAM Systems | Globant SA vs. Concentrix | Globant SA vs. Gartner | Globant SA vs. Accenture plc |
| Applied Digital vs. Netcapital | Applied Digital vs. Zhong Yang Financial | Applied Digital vs. Marathon Digital Holdings | Applied Digital vs. Riot Blockchain |
Check out your portfolio center.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.
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