Correlation Between GMO Internet and GLG LIFE
Can any of the company-specific risk be diversified away by investing in both GMO Internet and GLG LIFE 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 GMO Internet and GLG LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMO Internet and GLG LIFE TECH, you can compare the effects of market volatilities on GMO Internet and GLG LIFE 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 GMO Internet with a short position of GLG LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMO Internet and GLG LIFE.
Diversification Opportunities for GMO Internet and GLG LIFE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GMO and GLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GMO Internet and GLG LIFE TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLG LIFE TECH and GMO Internet 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 GMO Internet are associated (or correlated) with GLG LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLG LIFE TECH has no effect on the direction of GMO Internet i.e., GMO Internet and GLG LIFE go up and down completely randomly.
Pair Corralation between GMO Internet and GLG LIFE
If you would invest 2.00 in GLG LIFE TECH on October 11, 2024 and sell it today you would earn a total of 0.00 from holding GLG LIFE TECH or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMO Internet vs. GLG LIFE TECH
Performance |
| Timeline |
| GMO Internet |
| GLG LIFE TECH |
GMO Internet and GLG LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMO Internet and GLG LIFE
The main advantage of trading using opposite GMO Internet and GLG LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMO Internet position performs unexpectedly, GLG LIFE 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 GLG LIFE will offset losses from the drop in GLG LIFE's long position.| GMO Internet vs. SIERRA METALS | GMO Internet vs. Easy Software AG | GMO Internet vs. Axway Software SA | GMO Internet vs. Forsys Metals Corp |
| GLG LIFE vs. GMO Internet | GLG LIFE vs. Ribbon Communications | GLG LIFE vs. ecotel communication ag | GLG LIFE vs. China Communications Services |
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 Stocks Directory module to find actively traded stocks across global markets.
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