Correlation Between Glucose Health and London Stock

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

By analyzing existing cross correlation between Glucose Health and London Stock Exchange, you can compare the effects of market volatilities on Glucose Health and London Stock 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 Glucose Health with a short position of London Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glucose Health and London Stock.

Diversification Opportunities for Glucose Health and London Stock

-0.64

Correlation Coefficient

Glucose Health  London Stock

Excellent diversification

The 3 months correlation between Glucose and London is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Glucose Health and London Stock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Stock Exchange and Glucose Health 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 Glucose Health are associated (or correlated) with London Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Stock Exchange has no effect on the direction of Glucose Health i.e., Glucose Health and London Stock go up and down completely randomly.

Pair Corralation between Glucose Health and London Stock

Given the investment horizon of 90 days Glucose Health is expected to generate 10.71 times more return on investment than London Stock. However, Glucose Health is 10.71 times more volatile than London Stock Exchange. It trades about 0.03 of its potential returns per unit of risk. London Stock Exchange is currently generating about 0.07 per unit of risk. If you would invest  21.00  in Glucose Health on September 19, 2024 and sell it today you would lose (8.00) from holding Glucose Health or give up 38.1% of portfolio value over 90 days.

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

Glucose Health  vs.  London Stock Exchange

Glucose Health

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glucose Health are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Glucose Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

London Stock Exchange

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in London Stock Exchange are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, London Stock may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Glucose Health and London Stock

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

The idea behind Glucose Health and London Stock Exchange 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.