Correlation Between Ms Global and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Ms Global and Glg Intl 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 Ms Global and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ms Global Fixed and Glg Intl Small, you can compare the effects of market volatilities on Ms Global and Glg Intl 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 Ms Global with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ms Global and Glg Intl.
Diversification Opportunities for Ms Global and Glg Intl
Very poor diversification
The 3 months correlation between MFIRX and Glg is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ms Global Fixed and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small and Ms Global 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 Ms Global Fixed are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Ms Global i.e., Ms Global and Glg Intl go up and down completely randomly.
Pair Corralation between Ms Global and Glg Intl
Assuming the 90 days horizon Ms Global is expected to generate 4.6 times less return on investment than Glg Intl. But when comparing it to its historical volatility, Ms Global Fixed is 5.75 times less risky than Glg Intl. It trades about 0.33 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,535 in Glg Intl Small on November 5, 2024 and sell it today you would earn a total of 376.00 from holding Glg Intl Small or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ms Global Fixed vs. Glg Intl Small
Performance |
| Timeline |
| Ms Global Fixed |
| Glg Intl Small |
Ms Global and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ms Global and Glg Intl
The main advantage of trading using opposite Ms Global and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ms Global position performs unexpectedly, Glg Intl 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 Intl will offset losses from the drop in Glg Intl's long position.| Ms Global vs. Scharf Global Opportunity | Ms Global vs. Qs Large Cap | Ms Global vs. Barings Global Floating | Ms Global vs. Rational Strategic Allocation |
| Glg Intl vs. Goldman Sachs Financial | Glg Intl vs. Financials Ultrasector Profund | Glg Intl vs. Davis Financial Fund | Glg Intl vs. Blackrock Financial Institutions |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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