Correlation Between Glg Intl and Invesco Convertible
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Invesco Convertible 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 Intl and Invesco Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and Invesco Vertible Securities, you can compare the effects of market volatilities on Glg Intl and Invesco Convertible 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 Intl with a short position of Invesco Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Invesco Convertible.
Diversification Opportunities for Glg Intl and Invesco Convertible
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glg and Invesco is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Invesco Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Vertible Sec and Glg Intl 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 Intl Small are associated (or correlated) with Invesco Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Vertible Sec has no effect on the direction of Glg Intl i.e., Glg Intl and Invesco Convertible go up and down completely randomly.
Pair Corralation between Glg Intl and Invesco Convertible
Assuming the 90 days horizon Glg Intl Small is expected to generate 1.5 times more return on investment than Invesco Convertible. However, Glg Intl is 1.5 times more volatile than Invesco Vertible Securities. It trades about 0.14 of its potential returns per unit of risk. Invesco Vertible Securities is currently generating about 0.11 per unit of risk. If you would invest 8,485 in Glg Intl Small on October 23, 2024 and sell it today you would earn a total of 199.00 from holding Glg Intl Small or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Glg Intl Small vs. Invesco Vertible Securities
Performance |
| Timeline |
| Glg Intl Small |
| Invesco Vertible Sec |
Glg Intl and Invesco Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Invesco Convertible
The main advantage of trading using opposite Glg Intl and Invesco Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Invesco Convertible 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 Invesco Convertible will offset losses from the drop in Invesco Convertible's long position.| Glg Intl vs. Cref Money Market | Glg Intl vs. Pace Select Advisors | Glg Intl vs. State Street Master | Glg Intl vs. Hsbc Treasury Money |
| Invesco Convertible vs. Franklin Small Cap | Invesco Convertible vs. Glg Intl Small | Invesco Convertible vs. Smallcap Fund Fka | Invesco Convertible vs. Sp Smallcap 600 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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