Correlation Between Glg Intl and American Funds
Can any of the company-specific risk be diversified away by investing in both Glg Intl and American Funds 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 American Funds 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 American Funds New, you can compare the effects of market volatilities on Glg Intl and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and American Funds.
Diversification Opportunities for Glg Intl and American Funds
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Glg and American is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of Glg Intl i.e., Glg Intl and American Funds go up and down completely randomly.
Pair Corralation between Glg Intl and American Funds
Assuming the 90 days horizon Glg Intl Small is expected to generate 1.16 times more return on investment than American Funds. However, Glg Intl is 1.16 times more volatile than American Funds New. It trades about 0.07 of its potential returns per unit of risk. American Funds New is currently generating about 0.08 per unit of risk. If you would invest 6,459 in Glg Intl Small on September 4, 2024 and sell it today you would earn a total of 1,908 from holding Glg Intl Small or generate 29.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. American Funds New
Performance |
| Timeline |
| Glg Intl Small |
| American Funds New |
Glg Intl and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and American Funds
The main advantage of trading using opposite Glg Intl and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Glg Intl vs. Lord Abbett Health | Glg Intl vs. Blackrock Health Sciences | Glg Intl vs. Alger Health Sciences | Glg Intl vs. Invesco Global Health |
| American Funds vs. Aqr Managed Futures | American Funds vs. Guidepath Managed Futures | American Funds vs. Ab Bond Inflation | American Funds vs. Tiaa Cref Inflation Linked Bond |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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