Correlation Between AppHarvest and GLG Life
Can any of the company-specific risk be diversified away by investing in both AppHarvest and GLG Life 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 AppHarvest and GLG Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AppHarvest and GLG Life Tech, you can compare the effects of market volatilities on AppHarvest and GLG Life 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 AppHarvest with a short position of GLG Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of AppHarvest and GLG Life.
Diversification Opportunities for AppHarvest and GLG Life
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AppHarvest and GLG is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AppHarvest and GLG Life Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLG Life Tech and AppHarvest 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 AppHarvest are associated (or correlated) with GLG Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLG Life Tech has no effect on the direction of AppHarvest i.e., AppHarvest and GLG Life go up and down completely randomly.
Pair Corralation between AppHarvest and GLG Life
Given the investment horizon of 90 days AppHarvest is expected to under-perform the GLG Life. But the stock apears to be less risky and, when comparing its historical volatility, AppHarvest is 2.89 times less risky than GLG Life. The stock trades about -0.07 of its potential returns per unit of risk. The GLG Life Tech is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1.19 in GLG Life Tech on August 31, 2024 and sell it today you would earn a total of 3.63 from holding GLG Life Tech or generate 305.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 16.91% |
| Values | Daily Returns |
AppHarvest vs. GLG Life Tech
Performance |
| Timeline |
| AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| GLG Life Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AppHarvest and GLG Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AppHarvest and GLG Life
The main advantage of trading using opposite AppHarvest and GLG Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AppHarvest position performs unexpectedly, GLG Life 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 Life will offset losses from the drop in GLG Life's long position.| AppHarvest vs. Porch Group | AppHarvest vs. Hydrofarm Holdings Group | AppHarvest vs. Danimer Scientific | AppHarvest vs. Open Lending Corp |
| GLG Life vs. Golden Agri Resources | GLG Life vs. Edible Garden AG | GLG Life vs. Vital Farms | GLG Life vs. Local Bounti Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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