Correlation Between Red Oak and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Red Oak 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 Red Oak and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Oak Technology and Glg Intl Small, you can compare the effects of market volatilities on Red Oak 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 Red Oak with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Glg Intl.
Diversification Opportunities for Red Oak and Glg Intl
Almost no diversification
The 3 months correlation between Red and Glg is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology 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 Red Oak 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 Red Oak Technology 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 Red Oak i.e., Red Oak and Glg Intl go up and down completely randomly.
Pair Corralation between Red Oak and Glg Intl
Assuming the 90 days horizon Red Oak Technology is expected to generate 1.06 times more return on investment than Glg Intl. However, Red Oak is 1.06 times more volatile than Glg Intl Small. It trades about 0.1 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.1 per unit of risk. If you would invest 4,851 in Red Oak Technology on September 22, 2024 and sell it today you would earn a total of 109.00 from holding Red Oak Technology or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. Glg Intl Small
Performance |
| Timeline |
| Red Oak Technology |
| Glg Intl Small |
Red Oak and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Glg Intl
The main advantage of trading using opposite Red Oak and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak 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.| Red Oak vs. Pin Oak Equity | Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus |
| Glg Intl vs. T Rowe Price | Glg Intl vs. Qs Global Equity | Glg Intl vs. Crossmark Steward Equity | Glg Intl vs. Dreyfusnewton International Equity |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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