Correlation Between GLG LIFE and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and FAST RETAIL 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 FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on GLG LIFE and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and FAST RETAIL.
Diversification Opportunities for GLG LIFE and FAST RETAIL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and FAST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of GLG LIFE i.e., GLG LIFE and FAST RETAIL go up and down completely randomly.
Pair Corralation between GLG LIFE and FAST RETAIL
If you would invest 3,080 in FAST RETAIL ADR on September 25, 2024 and sell it today you would earn a total of 100.00 from holding FAST RETAIL ADR or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLG LIFE TECH vs. FAST RETAIL ADR
Performance |
| Timeline |
| GLG LIFE TECH |
| FAST RETAIL ADR |
GLG LIFE and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and FAST RETAIL
The main advantage of trading using opposite GLG LIFE and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.The idea behind GLG LIFE TECH and FAST RETAIL ADR 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.| FAST RETAIL vs. FAST RETAILCOSPHDR 1 | FAST RETAIL vs. Ross Stores | FAST RETAIL vs. Stitch Fix | FAST RETAIL vs. AOYAMA TRADING |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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