Correlation Between Glg Intl and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Glg Intl and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Growth Strategy.
Diversification Opportunities for Glg Intl and Growth Strategy
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glg and Growth is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Glg Intl i.e., Glg Intl and Growth Strategy go up and down completely randomly.
Pair Corralation between Glg Intl and Growth Strategy
Assuming the 90 days horizon Glg Intl is expected to generate 1.18 times less return on investment than Growth Strategy. In addition to that, Glg Intl is 1.75 times more volatile than Growth Strategy Fund. It trades about 0.06 of its total potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,183 in Growth Strategy Fund on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Growth Strategy Fund or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Growth Strategy Fund
Performance |
| Timeline |
| Glg Intl Small |
| Growth Strategy |
Glg Intl and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Growth Strategy
The main advantage of trading using opposite Glg Intl and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Glg Intl vs. Oppenheimer Main Street | Glg Intl vs. Oppenheimer Intl Small | Glg Intl vs. Oppenheimer Main Street | Glg Intl vs. Oppenheimer Global Strtgc |
| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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