Correlation Between GlaxoSmithKline PLC and Ackerstein
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Ackerstein 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 Ackerstein 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 Ackerstein Group, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Ackerstein 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 Ackerstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Ackerstein.
Diversification Opportunities for GlaxoSmithKline PLC and Ackerstein
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Ackerstein is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Ackerstein Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ackerstein Group 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 Ackerstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ackerstein Group has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Ackerstein go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Ackerstein
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Ackerstein. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.76 times less risky than Ackerstein. The stock trades about -0.24 of its potential returns per unit of risk. The Ackerstein Group is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 51,310 in Ackerstein Group on August 30, 2024 and sell it today you would earn a total of 20,660 from holding Ackerstein Group or generate 40.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.88% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Ackerstein Group
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Ackerstein Group |
GlaxoSmithKline PLC and Ackerstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Ackerstein
The main advantage of trading using opposite GlaxoSmithKline PLC and Ackerstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Ackerstein 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 Ackerstein will offset losses from the drop in Ackerstein'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 |
| Ackerstein vs. G Willi Food International | Ackerstein vs. Ilex Medical | Ackerstein vs. Willy Food | Ackerstein vs. Rimon Consulting Management |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |