Correlation Between Local Bounti and GLG Life
Can any of the company-specific risk be diversified away by investing in both Local Bounti 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 Local Bounti and GLG Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Local Bounti Corp and GLG Life Tech, you can compare the effects of market volatilities on Local Bounti 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 Local Bounti with a short position of GLG Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Local Bounti and GLG Life.
Diversification Opportunities for Local Bounti and GLG Life
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Local and GLG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Local Bounti Corp 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 Local Bounti 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 Local Bounti Corp 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 Local Bounti i.e., Local Bounti and GLG Life go up and down completely randomly.
Pair Corralation between Local Bounti and GLG Life
If you would invest 209.00 in Local Bounti Corp on October 26, 2024 and sell it today you would earn a total of 5.00 from holding Local Bounti Corp or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Local Bounti Corp vs. GLG Life Tech
Performance |
| Timeline |
| Local Bounti Corp |
| GLG Life Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Local Bounti and GLG Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Local Bounti and GLG Life
The main advantage of trading using opposite Local Bounti and GLG Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Local Bounti 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.| Local Bounti vs. Fresh Del Monte | Local Bounti vs. Alico Inc | Local Bounti vs. SW Seed Company | Local Bounti vs. Adecoagro SA |
| GLG Life vs. Golden Agri Resources | GLG Life vs. Edible Garden AG | GLG Life vs. Vital Farms | GLG Life vs. Local Bounti Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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