Correlation Between Balanced Strategy and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Balanced Strategy 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 Balanced Strategy and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Strategy Fund and Glg Intl Small, you can compare the effects of market volatilities on Balanced Strategy 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 Balanced Strategy with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Glg Intl.
Diversification Opportunities for Balanced Strategy and Glg Intl
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Glg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy 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 Balanced Strategy 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 Balanced Strategy 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 Balanced Strategy i.e., Balanced Strategy and Glg Intl go up and down completely randomly.
Pair Corralation between Balanced Strategy and Glg Intl
Assuming the 90 days horizon Balanced Strategy is expected to generate 2.39 times less return on investment than Glg Intl. But when comparing it to its historical volatility, Balanced Strategy Fund is 2.06 times less risky than Glg Intl. It trades about 0.07 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,870 in Glg Intl Small on November 2, 2024 and sell it today you would earn a total of 3,054 from holding Glg Intl Small or generate 52.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Strategy Fund vs. Glg Intl Small
Performance |
| Timeline |
| Balanced Strategy |
| Glg Intl Small |
Balanced Strategy and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Strategy and Glg Intl
The main advantage of trading using opposite Balanced Strategy and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy 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.| Balanced Strategy vs. Putnam Retirement Advantage | Balanced Strategy vs. Columbia Moderate Growth | Balanced Strategy vs. Voya Target Retirement | Balanced Strategy vs. Putnman Retirement Ready |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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