Correlation Between GlaxoSmithKline PLC and Masterwork Machinery
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By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Masterwork Machinery, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Masterwork Machinery 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Masterwork Machinery.
Diversification Opportunities for GlaxoSmithKline PLC and Masterwork Machinery
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Masterwork is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork Machinery 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Masterwork Machinery go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Masterwork Machinery
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.69 times more return on investment than Masterwork Machinery. However, GlaxoSmithKline PLC ADR is 1.45 times less risky than Masterwork Machinery. It trades about 0.04 of its potential returns per unit of risk. Masterwork Machinery is currently generating about -0.16 per unit of risk. If you would invest 3,521 in GlaxoSmithKline PLC ADR on November 10, 2024 and sell it today you would earn a total of 83.00 from holding GlaxoSmithKline PLC ADR or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.5% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Masterwork Machinery
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Masterwork Machinery |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
GlaxoSmithKline PLC and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Masterwork Machinery
The main advantage of trading using opposite GlaxoSmithKline PLC and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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