Correlation Between Glenmede International and Total Market

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

By analyzing existing cross correlation between Glenmede International Secured and Total Market Portfolio, you can compare the effects of market volatilities on Glenmede International and Total Market 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 Glenmede International with a short position of Total Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glenmede International and Total Market.

Diversification Opportunities for Glenmede International and Total Market

0.69

Correlation Coefficient

Glenmede International  Total Market

Poor diversification

The 3 months correlation between Glenmede and Total is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Glenmede International Secured and Total Market Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Market Portfolio and Glenmede International 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 Glenmede International Secured are associated (or correlated) with Total Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Market Portfolio has no effect on the direction of Glenmede International i.e., Glenmede International and Total Market go up and down completely randomly.

Pair Corralation between Glenmede International and Total Market

Assuming the 90 days horizon Glenmede International Secured is expected to generate 0.53 times more return on investment than Total Market. However, Glenmede International Secured is 1.87 times less risky than Total Market. It trades about -0.02 of its potential returns per unit of risk. Total Market Portfolio is currently generating about -0.29 per unit of risk. If you would invest  528.00  in Glenmede International Secured on February 2, 2024 and sell it today you would lose (1.00) from holding Glenmede International Secured or give up 0.19% of portfolio value over 90 days.

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

Glenmede International Secured  vs.  Total Market Portfolio

Glenmede International

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Glenmede International Secured are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Glenmede International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Total Market Portfolio

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Total Market Portfolio are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Total Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Glenmede International and Total Market

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

The idea behind Glenmede International Secured and Total Market Portfolio 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 CEOs Directory module to screen CEOs from public companies around the world.