Correlation Between Glg Intl and Ivy Natural
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Ivy Natural 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 Ivy Natural 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 Ivy Natural Resources, you can compare the effects of market volatilities on Glg Intl and Ivy Natural 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 Ivy Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Ivy Natural.
Diversification Opportunities for Glg Intl and Ivy Natural
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Glg and Ivy is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Ivy Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Natural Resources 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 Ivy Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Natural Resources has no effect on the direction of Glg Intl i.e., Glg Intl and Ivy Natural go up and down completely randomly.
Pair Corralation between Glg Intl and Ivy Natural
Assuming the 90 days horizon Glg Intl Small is expected to generate 0.96 times more return on investment than Ivy Natural. However, Glg Intl Small is 1.04 times less risky than Ivy Natural. It trades about 0.36 of its potential returns per unit of risk. Ivy Natural Resources is currently generating about 0.15 per unit of risk. If you would invest 8,346 in Glg Intl Small on November 3, 2024 and sell it today you would earn a total of 565.00 from holding Glg Intl Small or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Ivy Natural Resources
Performance |
| Timeline |
| Glg Intl Small |
| Ivy Natural Resources |
Glg Intl and Ivy Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Ivy Natural
The main advantage of trading using opposite Glg Intl and Ivy Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Ivy Natural 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 Ivy Natural will offset losses from the drop in Ivy Natural's long position.| Glg Intl vs. Hunter Small Cap | Glg Intl vs. Ab Small Cap | Glg Intl vs. Df Dent Small | Glg Intl vs. Needham Small Cap |
| Ivy Natural vs. Fidelity Advisor Technology | Ivy Natural vs. Global Technology Portfolio | Ivy Natural vs. Blackrock Science Technology | Ivy Natural vs. Hennessy Technology Fund |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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