Correlation Between GLG Life and Wilmar International

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

Diversification Opportunities for GLG Life and Wilmar International

0.18

Correlation Coefficient

GLG Life  Wilmar International

Average diversification

The 3 months correlation between GLG and Wilmar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GLG Life Tech and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of GLG Life i.e., GLG Life and Wilmar International go up and down completely randomly.

Pair Corralation between GLG Life and Wilmar International

If you would invest  4.82  in GLG Life Tech on August 31, 2024 and sell it today you would earn a total of  0.00  from holding GLG Life Tech or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

GLG Life Tech  vs.  Wilmar International

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. Despite nearly stable essential indicators, GLG Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Wilmar International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmar International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Wilmar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GLG Life and Wilmar International

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

The idea behind GLG Life Tech and Wilmar International 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.