Correlation Between GLG Life and Medavail Holdings

Can any of the company-specific risk be diversified away by investing in both GLG Life and Medavail Holdings 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 Medavail Holdings 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 Medavail Holdings, you can compare the effects of market volatilities on GLG Life and Medavail Holdings 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 Medavail Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG Life and Medavail Holdings.

Diversification Opportunities for GLG Life and Medavail Holdings

0.5

Correlation Coefficient

GLG Life  Medavail Holdings

Very weak diversification

The 3 months correlation between GLG and Medavail is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GLG Life Tech and Medavail Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medavail Holdings 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 Medavail Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medavail Holdings has no effect on the direction of GLG Life i.e., GLG Life and Medavail Holdings go up and down completely randomly.

Pair Corralation between GLG Life and Medavail Holdings

If you would invest  4.82  in GLG Life Tech on January 26, 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	6.67%
Values	Daily Returns

GLG Life Tech  vs.  Medavail Holdings

GLG Life Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLG Life Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, GLG Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Medavail Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medavail Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GLG Life and Medavail Holdings

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

The idea behind GLG Life Tech and Medavail Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.