Correlation Between GlaxoSmithKline PLC and LS 1x
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and LS 1x 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 LS 1x 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 LS 1x Amazon, you can compare the effects of market volatilities on GlaxoSmithKline PLC and LS 1x 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 LS 1x. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and LS 1x.
Diversification Opportunities for GlaxoSmithKline PLC and LS 1x
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and 1AMZ is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and LS 1x Amazon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS 1x Amazon 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 LS 1x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS 1x Amazon has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and LS 1x go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and LS 1x
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 11.09 times less return on investment than LS 1x. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 1.7 times less risky than LS 1x. It trades about 0.01 of its potential returns per unit of risk. LS 1x Amazon is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 284.00 in LS 1x Amazon on August 25, 2024 and sell it today you would earn a total of 321.00 from holding LS 1x Amazon or generate 113.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 99.4% |
Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. LS 1x Amazon
Performance |
Timeline |
GlaxoSmithKline PLC ADR |
LS 1x Amazon |
GlaxoSmithKline PLC and LS 1x Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GlaxoSmithKline PLC and LS 1x
The main advantage of trading using opposite GlaxoSmithKline PLC and LS 1x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, LS 1x 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 LS 1x will offset losses from the drop in LS 1x'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 |
LS 1x vs. Scottish Mortgage Investment | LS 1x vs. VinaCapital Vietnam Opportunity | LS 1x vs. Edinburgh Worldwide Investment | LS 1x vs. Baillie Gifford Growth |
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.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |