Correlation Between GLG LIFE and STEEL DYNAMICS
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and STEEL DYNAMICS 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 STEEL DYNAMICS 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 STEEL DYNAMICS, you can compare the effects of market volatilities on GLG LIFE and STEEL DYNAMICS 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 STEEL DYNAMICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and STEEL DYNAMICS.
Diversification Opportunities for GLG LIFE and STEEL DYNAMICS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and STEEL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and STEEL DYNAMICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STEEL DYNAMICS 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 STEEL DYNAMICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STEEL DYNAMICS has no effect on the direction of GLG LIFE i.e., GLG LIFE and STEEL DYNAMICS go up and down completely randomly.
Pair Corralation between GLG LIFE and STEEL DYNAMICS
If you would invest 10,912 in STEEL DYNAMICS on November 6, 2024 and sell it today you would earn a total of 1,490 from holding STEEL DYNAMICS or generate 13.65% 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. STEEL DYNAMICS
Performance |
| Timeline |
| GLG LIFE TECH |
| STEEL DYNAMICS |
GLG LIFE and STEEL DYNAMICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and STEEL DYNAMICS
The main advantage of trading using opposite GLG LIFE and STEEL DYNAMICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, STEEL DYNAMICS 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 STEEL DYNAMICS will offset losses from the drop in STEEL DYNAMICS's long position.| GLG LIFE vs. Molina Healthcare | GLG LIFE vs. Sekisui Chemical Co | GLG LIFE vs. MPH Health Care | GLG LIFE vs. X FAB Silicon Foundries |
| STEEL DYNAMICS vs. NORWEGIAN AIR SHUT | STEEL DYNAMICS vs. MGIC INVESTMENT | STEEL DYNAMICS vs. HK Electric Investments | STEEL DYNAMICS vs. SYSTEMAIR AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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