Correlation Between GlaxoSmithKline PLC and Pfeiffer Vacuum
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Pfeiffer Vacuum 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 Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Pfeiffer Vacuum 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 Pfeiffer Vacuum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Pfeiffer Vacuum.
Diversification Opportunities for GlaxoSmithKline PLC and Pfeiffer Vacuum
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Pfeiffer is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Pfeiffer Vacuum Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfeiffer Vacuum 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 Pfeiffer Vacuum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfeiffer Vacuum Tech has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Pfeiffer Vacuum go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Pfeiffer Vacuum
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Pfeiffer Vacuum. In addition to that, GlaxoSmithKline PLC is 2.72 times more volatile than Pfeiffer Vacuum Technology. It trades about -0.3 of its total potential returns per unit of risk. Pfeiffer Vacuum Technology is currently generating about 0.01 per unit of volatility. If you would invest 15,440 in Pfeiffer Vacuum Technology on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Pfeiffer Vacuum Technology or generate 0.13% 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. Pfeiffer Vacuum Technology
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Pfeiffer Vacuum Tech |
GlaxoSmithKline PLC and Pfeiffer Vacuum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Pfeiffer Vacuum
The main advantage of trading using opposite GlaxoSmithKline PLC and Pfeiffer Vacuum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Pfeiffer Vacuum 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 Pfeiffer Vacuum will offset losses from the drop in Pfeiffer Vacuum'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 |
| Pfeiffer Vacuum vs. Worldwide Healthcare Trust | Pfeiffer Vacuum vs. Medical Properties Trust | Pfeiffer Vacuum vs. Target Healthcare REIT | Pfeiffer Vacuum vs. Advanced Medical Solutions |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |