Correlation Between Glg Intl and Short Term
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Short Term 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 Intl and Short Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and Short Term Government Fund, you can compare the effects of market volatilities on Glg Intl and Short Term 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 Intl with a short position of Short Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Short Term.
Diversification Opportunities for Glg Intl and Short Term
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Glg and Short is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Short Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Government and Glg Intl 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 Intl Small are associated (or correlated) with Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Government has no effect on the direction of Glg Intl i.e., Glg Intl and Short Term go up and down completely randomly.
Pair Corralation between Glg Intl and Short Term
Assuming the 90 days horizon Glg Intl Small is expected to generate 6.98 times more return on investment than Short Term. However, Glg Intl is 6.98 times more volatile than Short Term Government Fund. It trades about 0.1 of its potential returns per unit of risk. Short Term Government Fund is currently generating about 0.05 per unit of risk. If you would invest 6,369 in Glg Intl Small on February 16, 2024 and sell it today you would earn a total of 1,766 from holding Glg Intl Small or generate 27.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Glg Intl Small vs. Short Term Government Fund
Performance |
Timeline |
Glg Intl Small |
Short Term Government |
Glg Intl and Short Term Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Glg Intl and Short Term
The main advantage of trading using opposite Glg Intl and Short Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Short Term 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 Short Term will offset losses from the drop in Short Term's long position.Glg Intl vs. American Funds New | Glg Intl vs. American Funds New | Glg Intl vs. New Perspective Fund | Glg Intl vs. New Perspective Fund |
Short Term vs. Vanguard Short Term Treasury | Short Term vs. Vanguard Short Term Treasury | Short Term vs. Vanguard Short Term Federal | Short Term vs. Vanguard Short Term Government |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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