Correlation Between GlaxoSmithKline PLC and Fujian Oriental

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Fujian Oriental 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 Fujian Oriental 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 Fujian Oriental Silver, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Fujian Oriental 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 Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Fujian Oriental.

Diversification Opportunities for GlaxoSmithKline PLC and Fujian Oriental

-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GlaxoSmithKline and Fujian is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental 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 Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Fujian Oriental go up and down completely randomly.

Pair Corralation between GlaxoSmithKline PLC and Fujian Oriental

Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.35 times more return on investment than Fujian Oriental. However, GlaxoSmithKline PLC ADR is 2.84 times less risky than Fujian Oriental. It trades about 0.01 of its potential returns per unit of risk. Fujian Oriental Silver is currently generating about -0.02 per unit of risk. If you would invest  3,410  in GlaxoSmithKline PLC ADR on August 28, 2024 and sell it today you would earn a total of  5.00  from holding GlaxoSmithKline PLC ADR or generate 0.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy96.16%
ValuesDaily Returns

GlaxoSmithKline PLC ADR  vs.  Fujian Oriental Silver

 Performance 
       Timeline  
GlaxoSmithKline PLC ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GlaxoSmithKline PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Fujian Oriental Silver 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fujian Oriental Silver are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fujian Oriental sustained solid returns over the last few months and may actually be approaching a breakup point.

GlaxoSmithKline PLC and Fujian Oriental Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GlaxoSmithKline PLC and Fujian Oriental

The main advantage of trading using opposite GlaxoSmithKline PLC and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental'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
The idea behind GlaxoSmithKline PLC ADR and Fujian Oriental Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Fujian Oriental vs. Industrial and Commercial
Fujian Oriental vs. Agricultural Bank of
Fujian Oriental vs. China Construction Bank
Fujian Oriental vs. Bank of China
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY