Correlation Between GLG Life and Brasilagro Adr

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

Diversification Opportunities for GLG Life and Brasilagro Adr

0.0

Correlation Coefficient

GLG Life  Brasilagro Adr

Pay attention - limited upside

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

Pair Corralation between GLG Life and Brasilagro Adr

If you would invest  355.00  in Brasilagro Adr on December 29, 2024 and sell it today you would earn a total of  39.00  from holding Brasilagro Adr or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GLG Life Tech  vs.  Brasilagro Adr

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. Despite nearly stable essential indicators, GLG Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Brasilagro Adr

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brasilagro Adr are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Brasilagro Adr may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GLG Life and Brasilagro Adr

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

The idea behind GLG Life Tech and Brasilagro Adr 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.