Correlation Between GlaxoSmithKline PLC and Hwaseung Industries
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Hwaseung Industries 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 GlaxoSmithKline PLC and Hwaseung Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Hwaseung Industries Co, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Hwaseung Industries 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 GlaxoSmithKline PLC with a short position of Hwaseung Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Hwaseung Industries.
Diversification Opportunities for GlaxoSmithKline PLC and Hwaseung Industries
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Hwaseung is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Hwaseung Industries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwaseung Industries and GlaxoSmithKline PLC 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 GlaxoSmithKline PLC ADR are associated (or correlated) with Hwaseung Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwaseung Industries has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Hwaseung Industries go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Hwaseung Industries
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Hwaseung Industries. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.25 times less risky than Hwaseung Industries. The stock trades about -0.3 of its potential returns per unit of risk. The Hwaseung Industries Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 411,500 in Hwaseung Industries Co on August 30, 2024 and sell it today you would earn a total of 7,000 from holding Hwaseung Industries Co or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Hwaseung Industries Co
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Hwaseung Industries |
GlaxoSmithKline PLC and Hwaseung Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Hwaseung Industries
The main advantage of trading using opposite GlaxoSmithKline PLC and Hwaseung Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Hwaseung Industries 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 Hwaseung Industries will offset losses from the drop in Hwaseung Industries' long position.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
| Hwaseung Industries vs. Bohae Brewery | Hwaseung Industries vs. Ssangyong Information Communication | Hwaseung Industries vs. LB Investment | Hwaseung Industries vs. Shinsegae Information Communication |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |