Correlation Between GLG LIFE and WESANA HEALTH

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

Diversification Opportunities for GLG LIFE and WESANA HEALTH

1.0

Correlation Coefficient

GLG LIFE  WESANA HEALTH

No risk reduction

The 3 months correlation between GLG and WESANA is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and WESANA HEALTH HOLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESANA HEALTH HOLD 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 WESANA HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESANA HEALTH HOLD has no effect on the direction of GLG LIFE i.e., GLG LIFE and WESANA HEALTH go up and down completely randomly.

Pair Corralation between GLG LIFE and WESANA HEALTH

If you would invest  0.15  in WESANA HEALTH HOLD on April 20, 2025 and sell it today you would earn a total of  0.00  from holding WESANA HEALTH HOLD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

GLG LIFE TECH  vs.  WESANA HEALTH HOLD

GLG LIFE TECH

Risk-Adjusted Performance

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.

WESANA HEALTH HOLD

Risk-Adjusted Performance

Very Weak

Over the last 90 days WESANA HEALTH HOLD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WESANA HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GLG LIFE and WESANA HEALTH

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

The idea behind GLG LIFE TECH and WESANA HEALTH HOLD 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.

Check out your portfolio center.

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.