Correlation Between GLG LIFE and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on GLG LIFE and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and CHINA EDUCATION.
Diversification Opportunities for GLG LIFE and CHINA EDUCATION
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of GLG LIFE i.e., GLG LIFE and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between GLG LIFE and CHINA EDUCATION
If you would invest 36.00 in CHINA EDUCATION GROUP on September 3, 2024 and sell it today you would earn a total of 5.00 from holding CHINA EDUCATION GROUP or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.34% |
| Values | Daily Returns |
GLG LIFE TECH vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| GLG LIFE TECH |
| CHINA EDUCATION GROUP |
GLG LIFE and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and CHINA EDUCATION
The main advantage of trading using opposite GLG LIFE and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.The idea behind GLG LIFE TECH and CHINA EDUCATION GROUP 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.| CHINA EDUCATION vs. INDOFOOD AGRI RES | CHINA EDUCATION vs. MUTUIONLINE | CHINA EDUCATION vs. Gruppo Mutuionline SpA | CHINA EDUCATION vs. GLG LIFE TECH |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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