Correlation Between Apple and GLG LIFE

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

By analyzing existing cross correlation between Apple Inc and GLG LIFE TECH, you can compare the effects of market volatilities on Apple and GLG LIFE 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 Apple with a short position of GLG LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and GLG LIFE.

Diversification Opportunities for Apple and GLG LIFE

0.0

Correlation Coefficient

Apple  GLG LIFE

Pay attention - limited upside

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

Pair Corralation between Apple and GLG LIFE

If you would invest  20,575  in Apple Inc on September 1, 2024 and sell it today you would earn a total of  1,860  from holding Apple Inc or generate 9.04% return on investment over 90 days.

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

Apple Inc  vs.  GLG LIFE TECH

Apple Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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.

Pair Trading with Apple and GLG LIFE

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

The idea behind Apple Inc and GLG LIFE TECH 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.