Correlation Between GLG Life and FSD Pharma
Can any of the company-specific risk be diversified away by investing in both GLG Life and FSD Pharma 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 GLG Life and FSD Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG Life Tech and FSD Pharma Class, you can compare the effects of market volatilities on GLG Life and FSD Pharma 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 GLG Life with a short position of FSD Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG Life and FSD Pharma.
Diversification Opportunities for GLG Life and FSD Pharma
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GLG and FSD is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GLG Life Tech and FSD Pharma Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSD Pharma Class and GLG Life 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 GLG Life Tech are associated (or correlated) with FSD Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSD Pharma Class has no effect on the direction of GLG Life i.e., GLG Life and FSD Pharma go up and down completely randomly.
Pair Corralation between GLG Life and FSD Pharma
If you would invest 4.82 in GLG Life Tech on January 24, 2024 and sell it today you would earn a total of 0.00 from holding GLG Life Tech or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 4.76% |
Values | Daily Returns |
GLG Life Tech vs. FSD Pharma Class
Performance |
Timeline |
GLG Life Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FSD Pharma Class |
GLG Life and FSD Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GLG Life and FSD Pharma
The main advantage of trading using opposite GLG Life and FSD Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG Life position performs unexpectedly, FSD Pharma 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 FSD Pharma will offset losses from the drop in FSD Pharma's long position.GLG Life vs. Golden Agri Resources | GLG Life vs. Edible Garden AG | GLG Life vs. Vital FarmsInc | GLG Life vs. Local Bounti Corp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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