Correlation Between Short Oil and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Short Oil 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 Short Oil and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Glg Intl Small, you can compare the effects of market volatilities on Short Oil 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 Short Oil with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Glg Intl.
Diversification Opportunities for Short Oil and Glg Intl
Excellent diversification
The 3 months correlation between Short and Glg is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas 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 Short Oil 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 Short Oil Gas 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 Short Oil i.e., Short Oil and Glg Intl go up and down completely randomly.
Pair Corralation between Short Oil and Glg Intl
Assuming the 90 days horizon Short Oil Gas is expected to under-perform the Glg Intl. In addition to that, Short Oil is 1.3 times more volatile than Glg Intl Small. It trades about -0.25 of its total potential returns per unit of risk. Glg Intl Small is currently generating about 0.16 per unit of volatility. If you would invest 8,154 in Glg Intl Small on September 3, 2024 and sell it today you would earn a total of 213.00 from holding Glg Intl Small or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Oil Gas vs. Glg Intl Small
Performance |
| Timeline |
| Short Oil Gas |
| Glg Intl Small |
Short Oil and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Oil and Glg Intl
The main advantage of trading using opposite Short Oil and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil 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.| Short Oil vs. Jennison Natural Resources | Short Oil vs. Icon Natural Resources | Short Oil vs. Tortoise Energy Independence | Short Oil vs. Clearbridge Energy Mlp |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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