Correlation Between GlaxoSmithKline PLC and Wonbang Tech
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech Co, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Wonbang Tech 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 Wonbang Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Wonbang Tech.
Diversification Opportunities for GlaxoSmithKline PLC and Wonbang Tech
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Wonbang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Wonbang Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonbang Tech 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 Wonbang Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonbang Tech has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Wonbang Tech go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Wonbang Tech
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 6.89 times less return on investment than Wonbang Tech. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 3.48 times less risky than Wonbang Tech. It trades about 0.02 of its potential returns per unit of risk. Wonbang Tech Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,213,584 in Wonbang Tech Co on August 28, 2024 and sell it today you would earn a total of 188,416 from holding Wonbang Tech Co or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.33% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Wonbang Tech Co
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Wonbang Tech |
GlaxoSmithKline PLC and Wonbang Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Wonbang Tech
The main advantage of trading using opposite GlaxoSmithKline PLC and Wonbang Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Wonbang Tech 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 Wonbang Tech will offset losses from the drop in Wonbang Tech'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 |
| Wonbang Tech vs. Lotte Non Life Insurance | Wonbang Tech vs. InfoBank | Wonbang Tech vs. Heungkuk Metaltech CoLtd | Wonbang Tech vs. Total Soft Bank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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