Correlation Between GLG LIFE and CVW CLEANTECH
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and CVW CLEANTECH 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 CVW CLEANTECH 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 CVW CLEANTECH INC, you can compare the effects of market volatilities on GLG LIFE and CVW CLEANTECH 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 CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and CVW CLEANTECH.
Diversification Opportunities for GLG LIFE and CVW CLEANTECH
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and CVW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC 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 CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of GLG LIFE i.e., GLG LIFE and CVW CLEANTECH go up and down completely randomly.
Pair Corralation between GLG LIFE and CVW CLEANTECH
If you would invest 53.00 in CVW CLEANTECH INC on August 28, 2024 and sell it today you would earn a total of 5.00 from holding CVW CLEANTECH INC or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
GLG LIFE TECH vs. CVW CLEANTECH INC
Performance |
| Timeline |
| GLG LIFE TECH |
| CVW CLEANTECH INC |
GLG LIFE and CVW CLEANTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and CVW CLEANTECH
The main advantage of trading using opposite GLG LIFE and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH's long position.The idea behind GLG LIFE TECH and CVW CLEANTECH INC 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.| CVW CLEANTECH vs. Southwest Airlines Co | CVW CLEANTECH vs. American Public Education | CVW CLEANTECH vs. Aegean Airlines SA | CVW CLEANTECH vs. Laureate Education |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges |