Correlation Between Power Dividend and Glg Intl

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

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

Diversification Opportunities for Power Dividend and Glg Intl

-0.03

Correlation Coefficient

Power Dividend  Glg Intl

Good diversification

The 3 months correlation between Power and Glg is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Power Dividend Index 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 Power Dividend 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 Power Dividend Index 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 Power Dividend i.e., Power Dividend and Glg Intl go up and down completely randomly.

Pair Corralation between Power Dividend and Glg Intl

Assuming the 90 days horizon Power Dividend Index is expected to under-perform the Glg Intl. In addition to that, Power Dividend is 1.22 times more volatile than Glg Intl Small. It trades about -0.08 of its total potential returns per unit of risk. Glg Intl Small is currently generating about 0.04 per unit of volatility. If you would invest  8,330  in Glg Intl Small on October 7, 2024 and sell it today you would earn a total of  105.00  from holding Glg Intl Small or generate 1.26% return on investment over 90 days.

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

Power Dividend Index  vs.  Glg Intl Small

Power Dividend Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Dividend Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Power Dividend 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Glg Intl Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Glg Intl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Power Dividend and Glg Intl

The main advantage of trading using opposite Power Dividend and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Dividend 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 Power Dividend Index 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.