Correlation Between GlaxoSmithKline PLC and Yang Ming
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Yang Ming 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 Yang Ming 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 Yang Ming Marine, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Yang Ming 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 Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Yang Ming.
Diversification Opportunities for GlaxoSmithKline PLC and Yang Ming
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Yang is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine 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 Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Yang Ming go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Yang Ming
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 8.71 times less return on investment than Yang Ming. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 2.08 times less risky than Yang Ming. It trades about 0.02 of its potential returns per unit of risk. Yang Ming Marine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,453 in Yang Ming Marine on August 31, 2024 and sell it today you would earn a total of 2,867 from holding Yang Ming Marine or generate 64.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.13% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Yang Ming Marine
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Yang Ming Marine |
GlaxoSmithKline PLC and Yang Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Yang Ming
The main advantage of trading using opposite GlaxoSmithKline PLC and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Yang Ming 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 Yang Ming will offset losses from the drop in Yang Ming'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 |
| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |