Correlation Between Scout Small and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Scout Small 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 Scout Small and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout Small Cap and Glg Intl Small, you can compare the effects of market volatilities on Scout Small 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 Scout Small with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Small and Glg Intl.
Diversification Opportunities for Scout Small and Glg Intl
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scout and Glg is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Scout Small Cap 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 Scout Small 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 Scout Small Cap 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 Scout Small i.e., Scout Small and Glg Intl go up and down completely randomly.
Pair Corralation between Scout Small and Glg Intl
Assuming the 90 days horizon Scout Small Cap is expected to under-perform the Glg Intl. In addition to that, Scout Small is 2.03 times more volatile than Glg Intl Small. It trades about -0.22 of its total potential returns per unit of risk. Glg Intl Small is currently generating about -0.01 per unit of volatility. If you would invest 8,681 in Glg Intl Small on December 4, 2024 and sell it today you would lose (99.00) from holding Glg Intl Small or give up 1.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Scout Small Cap vs. Glg Intl Small
Performance |
Timeline |
Scout Small Cap |
Glg Intl Small |
Scout Small and Glg Intl Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scout Small and Glg Intl
The main advantage of trading using opposite Scout Small and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Small 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.Scout Small vs. Barings Active Short | Scout Small vs. Rbc Short Duration | Scout Small vs. Siit Ultra Short | Scout Small vs. Alpine Ultra Short |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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