Correlation Between Glg Intl and Stock Index
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Stock Index 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 Stock Index 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 Stock Index Fund, you can compare the effects of market volatilities on Glg Intl and Stock Index 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 Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Stock Index.
Diversification Opportunities for Glg Intl and Stock Index
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glg and Stock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund 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 Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Glg Intl i.e., Glg Intl and Stock Index go up and down completely randomly.
Pair Corralation between Glg Intl and Stock Index
Assuming the 90 days horizon Glg Intl Small is expected to generate 1.03 times more return on investment than Stock Index. However, Glg Intl is 1.03 times more volatile than Stock Index Fund. It trades about 0.36 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.17 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Stock Index Fund
Performance |
| Timeline |
| Glg Intl Small |
| Stock Index Fund |
Glg Intl and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Stock Index
The main advantage of trading using opposite Glg Intl and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index'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 |
| Stock Index vs. Buffalo High Yield | Stock Index vs. Strategic Advisers Income | Stock Index vs. Federated High Yield | Stock Index vs. Simt High Yield |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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