Correlation Between GLG LIFE and Reinsurance Group

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

Diversification Opportunities for GLG LIFE and Reinsurance Group

0.0

Correlation Coefficient

GLG LIFE  Reinsurance Group

Pay attention - limited upside

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

Pair Corralation between GLG LIFE and Reinsurance Group

If you would invest  2.00  in GLG LIFE TECH on December 4, 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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GLG LIFE TECH  vs.  Reinsurance Group of

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.

Reinsurance Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reinsurance Group of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GLG LIFE and Reinsurance Group

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

The idea behind GLG LIFE TECH and Reinsurance Group of 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.