Correlation Between Dow Jones and GLG Life
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and GLG Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and GLG Life Tech, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of GLG Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and GLG Life.
Diversification Opportunities for Dow Jones and GLG Life
Weak diversification
The 3 months correlation between Dow and GLG is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and GLG Life go up and down completely randomly.
Pair Corralation between Dow Jones and GLG Life
If you would invest 3,408,927 in Dow Jones Industrial on November 5, 2024 and sell it today you would earn a total of 1,045,539 from holding Dow Jones Industrial or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.2% |
| Values | Daily Returns |
Dow Jones Industrial vs. GLG Life Tech
Performance |
| Timeline |
Dow Jones and GLG Life Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
GLG Life Tech
Pair trading matchups for GLG Life
Pair Trading with Dow Jones and GLG Life
The main advantage of trading using opposite Dow Jones and GLG Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Fernhill Beverage | Dow Jones vs. Fomento Economico Mexicano | Dow Jones vs. Loud Beverage Group | Dow Jones vs. Diageo PLC ADR |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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