Correlation Between Carsales and GLG LIFE
Can any of the company-specific risk be diversified away by investing in both Carsales and GLG LIFE 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 Carsales and GLG LIFE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and GLG LIFE TECH, you can compare the effects of market volatilities on Carsales and GLG LIFE 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 Carsales with a short position of GLG LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and GLG LIFE.
Diversification Opportunities for Carsales and GLG LIFE
Pay attention - limited upside
The 3 months correlation between Carsales and GLG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and GLG LIFE TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLG LIFE TECH and Carsales 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 CarsalesCom are associated (or correlated) with GLG LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLG LIFE TECH has no effect on the direction of Carsales i.e., Carsales and GLG LIFE go up and down completely randomly.
Pair Corralation between Carsales and GLG LIFE
If you would invest 2,180 in CarsalesCom on October 18, 2024 and sell it today you would earn a total of 140.00 from holding CarsalesCom or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. GLG LIFE TECH
Performance |
| Timeline |
| CarsalesCom |
| GLG LIFE TECH |
Carsales and GLG LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and GLG LIFE
The main advantage of trading using opposite Carsales and GLG LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, GLG LIFE 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 LIFE will offset losses from the drop in GLG LIFE's long position.| Carsales vs. Soken Chemical Engineering | Carsales vs. Harmony Gold Mining | Carsales vs. SEKISUI CHEMICAL | Carsales vs. TRI CHEMICAL LABORATINC |
| GLG LIFE vs. DEVRY EDUCATION GRP | GLG LIFE vs. DeVry Education Group | GLG LIFE vs. Laureate Education | GLG LIFE vs. Astral Foods Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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