Correlation Between DEVRY EDUCATION and GLG LIFE
Can any of the company-specific risk be diversified away by investing in both DEVRY EDUCATION 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 DEVRY EDUCATION and GLG LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DEVRY EDUCATION GRP and GLG LIFE TECH, you can compare the effects of market volatilities on DEVRY EDUCATION 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 DEVRY EDUCATION with a short position of GLG LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DEVRY EDUCATION and GLG LIFE.
Diversification Opportunities for DEVRY EDUCATION and GLG LIFE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DEVRY and GLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DEVRY EDUCATION GRP 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 DEVRY EDUCATION 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 DEVRY EDUCATION GRP 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 DEVRY EDUCATION i.e., DEVRY EDUCATION and GLG LIFE go up and down completely randomly.
Pair Corralation between DEVRY EDUCATION and GLG LIFE
Assuming the 90 days trading horizon DEVRY EDUCATION is expected to generate 13.57 times less return on investment than GLG LIFE. But when comparing it to its historical volatility, DEVRY EDUCATION GRP is 19.34 times less risky than GLG LIFE. It trades about 0.09 of its potential returns per unit of risk. GLG LIFE TECH is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.60 in GLG LIFE TECH on October 16, 2024 and sell it today you would earn a total of 0.40 from holding GLG LIFE TECH or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DEVRY EDUCATION GRP vs. GLG LIFE TECH
Performance |
| Timeline |
| DEVRY EDUCATION GRP |
| GLG LIFE TECH |
DEVRY EDUCATION and GLG LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DEVRY EDUCATION and GLG LIFE
The main advantage of trading using opposite DEVRY EDUCATION and GLG LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DEVRY EDUCATION 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.| DEVRY EDUCATION vs. Transport International Holdings | DEVRY EDUCATION vs. Geely Automobile Holdings | DEVRY EDUCATION vs. Ribbon Communications | DEVRY EDUCATION vs. Cairo Communication SpA |
| GLG LIFE vs. STRAYER EDUCATION | GLG LIFE vs. EMBARK EDUCATION LTD | GLG LIFE vs. AGF Management Limited | GLG LIFE vs. DEVRY EDUCATION GRP |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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