Correlation Between Glg Intl and Small Cap
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Small Cap 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 Small Cap 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 Small Cap Value Profund, you can compare the effects of market volatilities on Glg Intl and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Small Cap.
Diversification Opportunities for Glg Intl and Small Cap
Very weak diversification
The 3 months correlation between Glg and Small is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Small Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Glg Intl i.e., Glg Intl and Small Cap go up and down completely randomly.
Pair Corralation between Glg Intl and Small Cap
Assuming the 90 days horizon Glg Intl Small is expected to generate 0.98 times more return on investment than Small Cap. However, Glg Intl Small is 1.02 times less risky than Small Cap. It trades about -0.2 of its potential returns per unit of risk. Small Cap Value Profund is currently generating about -0.33 per unit of risk. If you would invest 8,688 in Glg Intl Small on October 15, 2024 and sell it today you would lose (345.00) from holding Glg Intl Small or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Small Cap Value Profund
Performance |
| Timeline |
| Glg Intl Small |
| Small Cap Value |
Glg Intl and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Small Cap
The main advantage of trading using opposite Glg Intl and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Glg Intl vs. Tfa Alphagen Growth | Glg Intl vs. T Rowe Price | Glg Intl vs. Qs Moderate Growth | Glg Intl vs. Qs Growth Fund |
| Small Cap vs. Touchstone Small Cap | Small Cap vs. Ab Small Cap | Small Cap vs. Glg Intl Small | Small Cap vs. Tax Managed Mid Small |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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