Correlation Between GlaxoSmithKline PLC and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Jeong Moon 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 Jeong Moon 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 Jeong Moon Information, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Jeong Moon.
Diversification Opportunities for GlaxoSmithKline PLC and Jeong Moon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Jeong is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Jeong Moon go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Jeong Moon
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Jeong Moon. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.07 times less risky than Jeong Moon. The stock trades about -0.31 of its potential returns per unit of risk. The Jeong Moon Information is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 93,600 in Jeong Moon Information on August 28, 2024 and sell it today you would lose (2,900) from holding Jeong Moon Information or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Jeong Moon Information
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Jeong Moon Information |
GlaxoSmithKline PLC and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Jeong Moon
The main advantage of trading using opposite GlaxoSmithKline PLC and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's 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 |
| Jeong Moon vs. Korea Real Estate | Jeong Moon vs. Korea Ratings Co | Jeong Moon vs. IQuest Co | Jeong Moon vs. Wonbang Tech Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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