Correlation Between GLG LIFE and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and NorAm Drilling 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 NorAm Drilling 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 NorAm Drilling AS, you can compare the effects of market volatilities on GLG LIFE and NorAm Drilling 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 NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and NorAm Drilling.
Diversification Opportunities for GLG LIFE and NorAm Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and NorAm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS 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 NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of GLG LIFE i.e., GLG LIFE and NorAm Drilling go up and down completely randomly.
Pair Corralation between GLG LIFE and NorAm Drilling
If you would invest 198.00 in NorAm Drilling AS on November 3, 2024 and sell it today you would earn a total of 95.00 from holding NorAm Drilling AS or generate 47.98% 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. NorAm Drilling AS
Performance |
| Timeline |
| GLG LIFE TECH |
| NorAm Drilling AS |
GLG LIFE and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and NorAm Drilling
The main advantage of trading using opposite GLG LIFE and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| GLG LIFE vs. UNITED UTILITIES GR | GLG LIFE vs. United Utilities Group | GLG LIFE vs. Chesapeake Utilities | GLG LIFE vs. MARKET VECTR RETAIL |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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