Correlation Between GLG Life and Local Bounti
Can any of the company-specific risk be diversified away by investing in both GLG Life and Local Bounti 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 Local Bounti 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 Local Bounti Corp, you can compare the effects of market volatilities on GLG Life and Local Bounti 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 Local Bounti. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG Life and Local Bounti.
Diversification Opportunities for GLG Life and Local Bounti
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GLG and Local is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GLG Life Tech and Local Bounti Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Local Bounti Corp 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 Local Bounti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Local Bounti Corp has no effect on the direction of GLG Life i.e., GLG Life and Local Bounti go up and down completely randomly.
Pair Corralation between GLG Life and Local Bounti
If you would invest 209.00 in Local Bounti Corp on October 26, 2024 and sell it today you would earn a total of 5.00 from holding Local Bounti Corp or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
GLG Life Tech vs. Local Bounti Corp
Performance |
| Timeline |
| GLG Life Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Local Bounti Corp |
GLG Life and Local Bounti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG Life and Local Bounti
The main advantage of trading using opposite GLG Life and Local Bounti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG Life position performs unexpectedly, Local Bounti 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 Local Bounti will offset losses from the drop in Local Bounti's long position.| GLG Life vs. Golden Agri Resources | GLG Life vs. Edible Garden AG | GLG Life vs. Vital Farms | GLG Life vs. Local Bounti Corp |
| Local Bounti vs. Fresh Del Monte | Local Bounti vs. Alico Inc | Local Bounti vs. SW Seed Company | Local Bounti vs. Adecoagro SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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