Correlation Between GlaxoSmithKline PLC and Songcheng Performance
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By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Songcheng Performance Develop, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Songcheng Performance 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 Songcheng Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Songcheng Performance.
Diversification Opportunities for GlaxoSmithKline PLC and Songcheng Performance
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Songcheng is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Songcheng Performance Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songcheng Performance 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 Songcheng Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songcheng Performance has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Songcheng Performance go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Songcheng Performance
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Songcheng Performance. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.17 times less risky than Songcheng Performance. The stock trades about -0.12 of its potential returns per unit of risk. The Songcheng Performance Develop is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,009 in Songcheng Performance Develop on August 29, 2024 and sell it today you would lose (89.00) from holding Songcheng Performance Develop or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Songcheng Performance Develop
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Songcheng Performance |
GlaxoSmithKline PLC and Songcheng Performance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Songcheng Performance
The main advantage of trading using opposite GlaxoSmithKline PLC and Songcheng Performance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Songcheng Performance 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 Songcheng Performance will offset losses from the drop in Songcheng Performance'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 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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