Correlation Between GlaxoSmithKline PLC and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse Silver, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Shinhan Inverse.
Diversification Opportunities for GlaxoSmithKline PLC and Shinhan Inverse
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Shinhan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Silver has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Shinhan Inverse go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Shinhan Inverse
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.71 times more return on investment than Shinhan Inverse. However, GlaxoSmithKline PLC ADR is 1.41 times less risky than Shinhan Inverse. It trades about 0.01 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.02 per unit of risk. If you would invest 3,251 in GlaxoSmithKline PLC ADR on August 26, 2024 and sell it today you would earn a total of 119.00 from holding GlaxoSmithKline PLC ADR or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.57% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Shinhan Inverse Silver
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Shinhan Inverse Silver |
GlaxoSmithKline PLC and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Shinhan Inverse
The main advantage of trading using opposite GlaxoSmithKline PLC and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse'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 |
| Shinhan Inverse vs. AptaBio Therapeutics | Shinhan Inverse vs. Daewoo SBI SPAC | Shinhan Inverse vs. Dream Security co | Shinhan Inverse vs. Microfriend |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |