Correlation Between Cardano and GLT Old

Can any of the company-specific risk be diversified away by investing in both Cardano and GLT Old 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 Cardano and GLT Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and GLT Old, you can compare the effects of market volatilities on Cardano and GLT Old 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 Cardano with a short position of GLT Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and GLT Old.

Diversification Opportunities for Cardano and GLT Old

0.1

Correlation Coefficient

Cardano  GLT Old

Average diversification

The 3 months correlation between Cardano and GLT is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and GLT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLT Old and Cardano 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 Cardano are associated (or correlated) with GLT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLT Old has no effect on the direction of Cardano i.e., Cardano and GLT Old go up and down completely randomly.

Pair Corralation between Cardano and GLT Old

Assuming the 90 days trading horizon Cardano is expected to generate 1.9 times more return on investment than GLT Old. However, Cardano is 1.9 times more volatile than GLT Old. It trades about 0.26 of its potential returns per unit of risk. GLT Old is currently generating about -0.21 per unit of risk. If you would invest  33.00  in Cardano on October 25, 2024 and sell it today you would earn a total of  65.00  from holding Cardano or generate 196.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	12.7%
Values	Daily Returns

Cardano  vs.  GLT Old

Cardano

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

GLT Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cardano and GLT Old

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

The idea behind Cardano and GLT Old 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.