Correlation Between GLG LIFE and PT Bank
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and PT Bank 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 PT Bank 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 PT Bank Central, you can compare the effects of market volatilities on GLG LIFE and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and PT Bank.
Diversification Opportunities for GLG LIFE and PT Bank
Pay attention - limited upside
The 3 months correlation between GLG and BZG2 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of GLG LIFE i.e., GLG LIFE and PT Bank go up and down completely randomly.
Pair Corralation between GLG LIFE and PT Bank
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 14.92 times more return on investment than PT Bank. However, GLG LIFE is 14.92 times more volatile than PT Bank Central. It trades about 0.08 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.02 per unit of risk. If you would invest 1.10 in GLG LIFE TECH on September 3, 2024 and sell it today you would earn a total of 0.90 from holding GLG LIFE TECH or generate 81.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
GLG LIFE TECH vs. PT Bank Central
Performance |
| Timeline |
| GLG LIFE TECH |
| PT Bank Central |
GLG LIFE and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and PT Bank
The main advantage of trading using opposite GLG LIFE and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.The idea behind GLG LIFE TECH and PT Bank Central 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.| PT Bank vs. Vulcan Materials | PT Bank vs. RYU Apparel | PT Bank vs. THORNEY TECHS LTD | PT Bank vs. Hyster Yale Materials Handling |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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