Correlation Between GlaxoSmithKline PLC and Affiliated Resources
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Affiliated Resources 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 Affiliated Resources 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 Affiliated Resources Corp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Affiliated Resources 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 Affiliated Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Affiliated Resources.
Diversification Opportunities for GlaxoSmithKline PLC and Affiliated Resources
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Affiliated is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Affiliated Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Resources Corp 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 Affiliated Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Resources Corp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Affiliated Resources go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Affiliated Resources
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 215.55 times less return on investment than Affiliated Resources. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 34.16 times less risky than Affiliated Resources. It trades about 0.01 of its potential returns per unit of risk. Affiliated Resources Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Affiliated Resources Corp on August 31, 2024 and sell it today you would earn a total of 8.17 from holding Affiliated Resources Corp or generate 27233.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Affiliated Resources Corp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Affiliated Resources Corp |
GlaxoSmithKline PLC and Affiliated Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Affiliated Resources
The main advantage of trading using opposite GlaxoSmithKline PLC and Affiliated Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Affiliated Resources 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 Affiliated Resources will offset losses from the drop in Affiliated Resources' 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 |
| Affiliated Resources vs. BRP Inc | Affiliated Resources vs. Arrow Electronics | Affiliated Resources vs. Playtika Holding Corp | Affiliated Resources vs. Playa Hotels Resorts |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |