Correlation Between GLG LIFE and Transport International

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

Diversification Opportunities for GLG LIFE and Transport International

0.0

Correlation Coefficient

GLG LIFE  Transport International

Pay attention - limited upside

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

Pair Corralation between GLG LIFE and Transport International

If you would invest  94.00  in Transport International Holdings on December 23, 2024 and sell it today you would earn a total of  1.00  from holding Transport International Holdings or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

GLG LIFE TECH  vs.  Transport International Holdin

GLG LIFE TECH

Risk-Adjusted Performance

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Transport International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Transport International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GLG LIFE and Transport International

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

The idea behind GLG LIFE TECH and Transport International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.