Correlation Between Glg Intl and Massachusetts Investors

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Massachusetts Investors 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 Massachusetts Investors 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 Massachusetts Investors Growth, you can compare the effects of market volatilities on Glg Intl and Massachusetts Investors 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 Massachusetts Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Massachusetts Investors.

Diversification Opportunities for Glg Intl and Massachusetts Investors

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Glg and Massachusetts is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Massachusetts Investors Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Investors 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 Massachusetts Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Investors has no effect on the direction of Glg Intl i.e., Glg Intl and Massachusetts Investors go up and down completely randomly.

Pair Corralation between Glg Intl and Massachusetts Investors

Assuming the 90 days horizon Glg Intl Small is expected to generate 1.34 times more return on investment than Massachusetts Investors. However, Glg Intl is 1.34 times more volatile than Massachusetts Investors Growth. It trades about 0.09 of its potential returns per unit of risk. Massachusetts Investors Growth is currently generating about 0.08 per unit of risk. If you would invest  6,968  in Glg Intl Small on September 14, 2024 and sell it today you would earn a total of  1,779  from holding Glg Intl Small or generate 25.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Glg Intl Small  vs.  Massachusetts Investors Growth

 Performance 
       Timeline  
Glg Intl Small 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Glg Intl Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Glg Intl may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Massachusetts Investors 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Massachusetts Investors Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Massachusetts Investors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Glg Intl and Massachusetts Investors Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Glg Intl and Massachusetts Investors

The main advantage of trading using opposite Glg Intl and Massachusetts Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Massachusetts Investors 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 Massachusetts Investors will offset losses from the drop in Massachusetts Investors' long position.
The idea behind Glg Intl Small and Massachusetts Investors Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Commodity Directory
Find actively traded commodities issued by global exchanges
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope