Correlation Between GLG LIFE and VANADIUMCORP RES

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

Diversification Opportunities for GLG LIFE and VANADIUMCORP RES

0.0

Correlation Coefficient

GLG LIFE  VANADIUMCORP RES

Pay attention - limited upside

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

Pair Corralation between GLG LIFE and VANADIUMCORP RES

If you would invest  14.00  in VANADIUMCORP RES on September 23, 2024 and sell it today you would lose (6.25) from holding VANADIUMCORP RES or give up 44.64% of portfolio value over 90 days.

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

GLG LIFE TECH  vs.  VANADIUMCORP RES

GLG LIFE TECH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLG LIFE TECH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GLG LIFE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

VANADIUMCORP RES

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VANADIUMCORP RES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, VANADIUMCORP RES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GLG LIFE and VANADIUMCORP RES

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

The idea behind GLG LIFE TECH and VANADIUMCORP RES 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.