Correlation Between Glenmede International and Transamerica Multi

Can any of the company-specific risk be diversified away by investing in both Glenmede International and Transamerica Multi 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 Glenmede International and Transamerica Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glenmede International Secured and Transamerica Multi Managed Balanced, you can compare the effects of market volatilities on Glenmede International and Transamerica Multi 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 Glenmede International with a short position of Transamerica Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glenmede International and Transamerica Multi.

Diversification Opportunities for Glenmede International and Transamerica Multi

0.79

Correlation Coefficient

Glenmede International  Transamerica Multi

Poor diversification

The 3 months correlation between Glenmede and Transamerica is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Glenmede International Secured and Transamerica Multi Managed Bal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Multi and Glenmede International 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 Glenmede International Secured are associated (or correlated) with Transamerica Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Multi has no effect on the direction of Glenmede International i.e., Glenmede International and Transamerica Multi go up and down completely randomly.

Pair Corralation between Glenmede International and Transamerica Multi

Assuming the 90 days horizon Glenmede International Secured is expected to generate 0.7 times more return on investment than Transamerica Multi. However, Glenmede International Secured is 1.43 times less risky than Transamerica Multi. It trades about 0.09 of its potential returns per unit of risk. Transamerica Multi Managed Balanced is currently generating about -0.16 per unit of risk. If you would invest  528.00  in Glenmede International Secured on January 31, 2024 and sell it today you would earn a total of  4.00  from holding Glenmede International Secured or generate 0.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Glenmede International Secured  vs.  Transamerica Multi Managed Bal

Glenmede International

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Glenmede International Secured are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Glenmede International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Multi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Multi Managed Balanced are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Transamerica Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Glenmede International and Transamerica Multi

The main advantage of trading using opposite Glenmede International and Transamerica Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glenmede International position performs unexpectedly, Transamerica Multi 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 Transamerica Multi will offset losses from the drop in Transamerica Multi's long position.

The idea behind Glenmede International Secured and Transamerica Multi Managed Balanced 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.