Correlation Between GLG LIFE and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and MAVEN WIRELESS 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 GLG LIFE and MAVEN WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on GLG LIFE and MAVEN WIRELESS 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 GLG LIFE with a short position of MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and MAVEN WIRELESS.
Diversification Opportunities for GLG LIFE and MAVEN WIRELESS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and MAVEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN and GLG LIFE 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 GLG LIFE TECH are associated (or correlated) with MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of GLG LIFE i.e., GLG LIFE and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between GLG LIFE and MAVEN WIRELESS
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 18.45 times more return on investment than MAVEN WIRELESS. However, GLG LIFE is 18.45 times more volatile than MAVEN WIRELESS SWEDEN. It trades about 0.06 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.01 per unit of risk. If you would invest 2.45 in GLG LIFE TECH on August 31, 2024 and sell it today you would lose (0.45) from holding GLG LIFE TECH or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
GLG LIFE TECH vs. MAVEN WIRELESS SWEDEN
Performance |
| Timeline |
| GLG LIFE TECH |
| MAVEN WIRELESS SWEDEN |
GLG LIFE and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and MAVEN WIRELESS
The main advantage of trading using opposite GLG LIFE and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.The idea behind GLG LIFE TECH and MAVEN WIRELESS SWEDEN 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.| MAVEN WIRELESS vs. ATT Inc | MAVEN WIRELESS vs. Deutsche Telekom AG | MAVEN WIRELESS vs. Superior Plus Corp | MAVEN WIRELESS vs. NMI Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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