Correlation Between GLG LIFE and WUXI BIOLOGICS

Can any of the company-specific risk be diversified away by investing in both GLG LIFE and WUXI BIOLOGICS 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 WUXI BIOLOGICS 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 WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on GLG LIFE and WUXI BIOLOGICS 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 WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and WUXI BIOLOGICS.

Diversification Opportunities for GLG LIFE and WUXI BIOLOGICS

0.0

Correlation Coefficient

GLG LIFE  WUXI BIOLOGICS

Pay attention - limited upside

The 3 months correlation between GLG and WUXI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 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 WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of GLG LIFE i.e., GLG LIFE and WUXI BIOLOGICS go up and down completely randomly.

Pair Corralation between GLG LIFE and WUXI BIOLOGICS

If you would invest  388.00  in WUXI BIOLOGICS UNSPADR2 on October 7, 2024 and sell it today you would earn a total of  30.00  from holding WUXI BIOLOGICS UNSPADR2 or generate 7.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

GLG LIFE TECH  vs.  WUXI BIOLOGICS UNSPADR2

GLG LIFE TECH

Risk-Adjusted Performance

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Very Weak

Over the last 90 days GLG LIFE TECH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GLG LIFE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

WUXI BIOLOGICS UNSPADR2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WUXI BIOLOGICS UNSPADR2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GLG LIFE and WUXI BIOLOGICS

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

The idea behind GLG LIFE TECH and WUXI BIOLOGICS UNSPADR2 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.