Correlation Between Pender Real and Glg Intl

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

By analyzing existing cross correlation between Pender Real Estate and Glg Intl Small, you can compare the effects of market volatilities on Pender Real and Glg Intl 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 Pender Real with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pender Real and Glg Intl.

Diversification Opportunities for Pender Real and Glg Intl

0.51

Correlation Coefficient

Pender Real  Glg Intl

Very weak diversification

The 3 months correlation between Pender and Glg is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small and Pender Real 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 Pender Real Estate are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Pender Real i.e., Pender Real and Glg Intl go up and down completely randomly.

Pair Corralation between Pender Real and Glg Intl

Assuming the 90 days horizon Pender Real is expected to generate 2.17 times less return on investment than Glg Intl. But when comparing it to its historical volatility, Pender Real Estate is 8.05 times less risky than Glg Intl. It trades about 0.25 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7,372  in Glg Intl Small on October 24, 2024 and sell it today you would earn a total of  1,312  from holding Glg Intl Small or generate 17.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pender Real Estate  vs.  Glg Intl Small

Pender Real Estate

Risk-Adjusted Performance

50 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Pender Real Estate are ranked lower than 50 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pender Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Glg Intl Small

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glg Intl Small are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Glg Intl may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pender Real and Glg Intl

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

The idea behind Pender Real Estate and Glg Intl Small 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..