Correlation Between GlaxoSmithKline PLC and Gudeng Precision
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Gudeng Precision 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 Gudeng Precision 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 Gudeng Precision Industrial, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Gudeng Precision 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 Gudeng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Gudeng Precision.
Diversification Opportunities for GlaxoSmithKline PLC and Gudeng Precision
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Gudeng is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Gudeng Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudeng Precision Ind 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 Gudeng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudeng Precision Ind has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Gudeng Precision go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Gudeng Precision
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Gudeng Precision. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.46 times less risky than Gudeng Precision. The stock trades about -0.3 of its potential returns per unit of risk. The Gudeng Precision Industrial is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 53,700 in Gudeng Precision Industrial on August 30, 2024 and sell it today you would lose (3,600) from holding Gudeng Precision Industrial or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Gudeng Precision Industrial
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Gudeng Precision Ind |
GlaxoSmithKline PLC and Gudeng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Gudeng Precision
The main advantage of trading using opposite GlaxoSmithKline PLC and Gudeng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Gudeng Precision 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 Gudeng Precision will offset losses from the drop in Gudeng Precision'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 |
| Gudeng Precision vs. GlobalWafers Co | Gudeng Precision vs. Vanguard International Semiconductor | Gudeng Precision vs. Marketech International Corp | Gudeng Precision vs. WIN Semiconductors |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |