Correlation Between Global Gold and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Global Gold and Glg Intl 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 Global Gold and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Glg Intl Small, you can compare the effects of market volatilities on Global Gold and Glg Intl 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 Global Gold with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Glg Intl.
Diversification Opportunities for Global Gold and Glg Intl
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Glg is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small and Global Gold 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 Global Gold Fund are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Global Gold i.e., Global Gold and Glg Intl go up and down completely randomly.
Pair Corralation between Global Gold and Glg Intl
Assuming the 90 days horizon Global Gold Fund is expected to generate 1.49 times more return on investment than Glg Intl. However, Global Gold is 1.49 times more volatile than Glg Intl Small. It trades about 0.31 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.1 per unit of risk. If you would invest 1,177 in Global Gold Fund on October 19, 2024 and sell it today you would earn a total of 91.00 from holding Global Gold Fund or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Global Gold Fund vs. Glg Intl Small
Performance |
| Timeline |
| Global Gold Fund |
| Glg Intl Small |
Global Gold and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Glg Intl
The main advantage of trading using opposite Global Gold and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.| Global Gold vs. Guidepath Conservative Income | Global Gold vs. Evaluator Conservative Rms | Global Gold vs. Putnam Diversified Income | Global Gold vs. Pimco Diversified Income |
| Glg Intl vs. International Investors Gold | Glg Intl vs. James Balanced Golden | Glg Intl vs. Global Gold Fund | Glg Intl vs. Gamco Global Gold |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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