Correlation Between GlaxoSmithKline PLC and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Amedeo Air.
Diversification Opportunities for GlaxoSmithKline PLC and Amedeo Air
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Amedeo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Amedeo Air go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Amedeo Air
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Amedeo Air. In addition to that, GlaxoSmithKline PLC is 1.98 times more volatile than Amedeo Air Four. It trades about -0.23 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.51 per unit of volatility. If you would invest 4,950 in Amedeo Air Four on September 1, 2024 and sell it today you would earn a total of 370.00 from holding Amedeo Air Four or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Amedeo Air Four
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Amedeo Air Four |
GlaxoSmithKline PLC and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Amedeo Air
The main advantage of trading using opposite GlaxoSmithKline PLC and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air'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 |
| Amedeo Air vs. Samsung Electronics Co | Amedeo Air vs. Samsung Electronics Co | Amedeo Air vs. Hyundai Motor | Amedeo Air vs. Toyota Motor Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |