Correlation Between GlaxoSmithKline PLC and J JILL
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and J JILL 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 J JILL 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 J JILL INC, you can compare the effects of market volatilities on GlaxoSmithKline PLC and J JILL 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 J JILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and J JILL.
Diversification Opportunities for GlaxoSmithKline PLC and J JILL
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and 1MJ1 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and J JILL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J JILL INC 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 J JILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J JILL INC has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and J JILL go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and J JILL
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 3.73 times less return on investment than J JILL. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 2.34 times less risky than J JILL. It trades about 0.01 of its potential returns per unit of risk. J JILL INC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,347 in J JILL INC on August 25, 2024 and sell it today you would lose (47.00) from holding J JILL INC or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.57% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. J JILL INC
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| J JILL INC |
GlaxoSmithKline PLC and J JILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and J JILL
The main advantage of trading using opposite GlaxoSmithKline PLC and J JILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, J JILL 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 J JILL will offset losses from the drop in J JILL'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 |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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