Correlation Between GlaxoSmithKline PLC and Amundi Index
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Amundi Index 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 Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Amundi Index.
Diversification Opportunities for GlaxoSmithKline PLC and Amundi Index
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Amundi is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Amundi Index go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Amundi Index
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Amundi Index. In addition to that, GlaxoSmithKline PLC is 1.78 times more volatile than Amundi Index Solutions. It trades about 0.0 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.17 per unit of volatility. If you would invest 8,160 in Amundi Index Solutions on August 29, 2024 and sell it today you would earn a total of 3,099 from holding Amundi Index Solutions or generate 37.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.81% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Amundi Index Solutions
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Amundi Index Solutions |
GlaxoSmithKline PLC and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Amundi Index
The main advantage of trading using opposite GlaxoSmithKline PLC and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index'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 |
| Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi Index Solutions |
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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