Correlation Between GLG LIFE and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and KOWORLD AG 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 KOWORLD AG 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 KOWORLD AG, you can compare the effects of market volatilities on GLG LIFE and KOWORLD AG 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 KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and KOWORLD AG.
Diversification Opportunities for GLG LIFE and KOWORLD AG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and KOWORLD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of GLG LIFE i.e., GLG LIFE and KOWORLD AG go up and down completely randomly.
Pair Corralation between GLG LIFE and KOWORLD AG
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 28.31 times more return on investment than KOWORLD AG. However, GLG LIFE is 28.31 times more volatile than KOWORLD AG. It trades about 0.06 of its potential returns per unit of risk. KOWORLD AG is currently generating about 0.01 per unit of risk. If you would invest 1.20 in GLG LIFE TECH on September 14, 2024 and sell it today you would earn a total of 0.80 from holding GLG LIFE TECH or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
GLG LIFE TECH vs. KOWORLD AG
Performance |
| Timeline |
| GLG LIFE TECH |
| KOWORLD AG |
GLG LIFE and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and KOWORLD AG
The main advantage of trading using opposite GLG LIFE and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG's long position.The idea behind GLG LIFE TECH and KOWORLD AG 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.| KOWORLD AG vs. Summit Materials | KOWORLD AG vs. Rayonier Advanced Materials | KOWORLD AG vs. ITALIAN WINE BRANDS | KOWORLD AG vs. SANOK RUBBER ZY |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |