Correlation Between GlaxoSmithKline PLC and Ahren Acquisition
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Ahren Acquisition 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 Ahren Acquisition 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 Ahren Acquisition Corp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Ahren Acquisition 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 Ahren Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Ahren Acquisition.
Diversification Opportunities for GlaxoSmithKline PLC and Ahren Acquisition
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Ahren is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Ahren Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ahren Acquisition 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 Ahren Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ahren Acquisition Corp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Ahren Acquisition go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Ahren Acquisition
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 1.55 times less return on investment than Ahren Acquisition. In addition to that, GlaxoSmithKline PLC is 14.77 times more volatile than Ahren Acquisition Corp. It trades about 0.01 of its total potential returns per unit of risk. Ahren Acquisition Corp is currently generating about 0.26 per unit of volatility. If you would invest 1,019 in Ahren Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 30.00 from holding Ahren Acquisition Corp or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 26.46% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Ahren Acquisition Corp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Ahren Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Ahren Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Ahren Acquisition
The main advantage of trading using opposite GlaxoSmithKline PLC and Ahren Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Ahren Acquisition 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 Ahren Acquisition will offset losses from the drop in Ahren Acquisition'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 |
| Ahren Acquisition vs. Manaris Corp | Ahren Acquisition vs. Alpha Star Acquisition | Ahren Acquisition vs. Alpha One | Ahren Acquisition vs. Athena Technology Acquisition |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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