Correlation Between SLC Agricola and GLG Life

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

By analyzing existing cross correlation between SLC Agricola SA and GLG Life Tech, you can compare the effects of market volatilities on SLC Agricola 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 SLC Agricola with a short position of GLG Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agricola and GLG Life.

Diversification Opportunities for SLC Agricola and GLG Life

0.45

Correlation Coefficient

SLC Agricola  GLG Life

Very weak diversification

The 3 months correlation between SLC and GLG is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agricola SA 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 SLC Agricola 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 SLC Agricola SA 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 SLC Agricola i.e., SLC Agricola and GLG Life go up and down completely randomly.

Pair Corralation between SLC Agricola and GLG Life

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	Weak
Accuracy	1.59%
Values	Daily Returns

SLC Agricola SA  vs.  GLG Life Tech

SLC Agricola SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SLC Agricola SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with SLC Agricola and GLG Life

The main advantage of trading using opposite SLC Agricola and GLG Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agricola 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 SLC Agricola SA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.