Correlation Between GLG Life and Vital Farms

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

Diversification Opportunities for GLG Life and Vital Farms

0.0

Correlation Coefficient

GLG Life  Vital Farms

Pay attention - limited upside

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

Pair Corralation between GLG Life and Vital Farms

If you would invest (100.00) in GLG Life Tech on December 27, 2024 and sell it today you would earn a total of  100.00  from holding GLG Life Tech or generate -100.0% 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.  Vital Farms

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.

Vital Farms

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vital Farms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GLG Life and Vital Farms

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

The idea behind GLG Life Tech and Vital Farms 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..