Correlation Between New Perspective and Glg Intl
Can any of the company-specific risk be diversified away by investing in both New Perspective 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 New Perspective and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Glg Intl Small, you can compare the effects of market volatilities on New Perspective 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 New Perspective with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Glg Intl.
Diversification Opportunities for New Perspective and Glg Intl
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Glg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund 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 New Perspective 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 New Perspective Fund 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 New Perspective i.e., New Perspective and Glg Intl go up and down completely randomly.
Pair Corralation between New Perspective and Glg Intl
Assuming the 90 days horizon New Perspective is expected to generate 1.79 times less return on investment than Glg Intl. But when comparing it to its historical volatility, New Perspective Fund is 1.3 times less risky than Glg Intl. It trades about 0.06 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,277 in Glg Intl Small on September 3, 2024 and sell it today you would earn a total of 3,090 from holding Glg Intl Small or generate 58.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Glg Intl Small
Performance |
| Timeline |
| New Perspective |
| Glg Intl Small |
New Perspective and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Glg Intl
The main advantage of trading using opposite New Perspective and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective 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.| New Perspective vs. Calvert Global Energy | New Perspective vs. Franklin Natural Resources | New Perspective vs. Fidelity Advisor Energy | New Perspective vs. Icon Natural Resources |
| Glg Intl vs. American Funds New | Glg Intl vs. American Funds New | Glg Intl vs. New Perspective Fund | Glg Intl vs. New Perspective Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |