Correlation Between TSJA and GLCN
Can any of the company-specific risk be diversified away by investing in both TSJA and GLCN 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 TSJA and GLCN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSJA and GLCN, you can compare the effects of market volatilities on TSJA and GLCN 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 TSJA with a short position of GLCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSJA and GLCN.
Diversification Opportunities for TSJA and GLCN
Pay attention - limited upside
The 3 months correlation between TSJA and GLCN is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding TSJA and GLCN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLCN and TSJA 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 TSJA are associated (or correlated) with GLCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLCN has no effect on the direction of TSJA i.e., TSJA and GLCN go up and down completely randomly.
Pair Corralation between TSJA and GLCN
If you would invest 2,307 in GLCN on September 3, 2024 and sell it today you would earn a total of 0.00 from holding GLCN or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TSJA vs. GLCN
Performance |
| Timeline |
| TSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| GLCN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TSJA and GLCN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSJA and GLCN
The main advantage of trading using opposite TSJA and GLCN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSJA position performs unexpectedly, GLCN 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 GLCN will offset losses from the drop in GLCN's long position.The idea behind TSJA and GLCN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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