Correlation Between GlaxoSmithKline PLC and Aferian Plc
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Aferian Plc 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 Aferian Plc 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 Aferian Plc, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Aferian Plc 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 Aferian Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Aferian Plc.
Diversification Opportunities for GlaxoSmithKline PLC and Aferian Plc
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Aferian is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Aferian Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aferian Plc 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 Aferian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aferian Plc has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Aferian Plc go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Aferian Plc
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.12 times more return on investment than Aferian Plc. However, GlaxoSmithKline PLC ADR is 8.53 times less risky than Aferian Plc. It trades about -0.23 of its potential returns per unit of risk. Aferian Plc is currently generating about -0.21 per unit of risk. If you would invest 3,659 in GlaxoSmithKline PLC ADR on August 31, 2024 and sell it today you would lose (226.00) from holding GlaxoSmithKline PLC ADR or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Aferian Plc
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Aferian Plc |
GlaxoSmithKline PLC and Aferian Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Aferian Plc
The main advantage of trading using opposite GlaxoSmithKline PLC and Aferian Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Aferian Plc 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 Aferian Plc will offset losses from the drop in Aferian Plc'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 |
| Aferian Plc vs. Legacy Education | Aferian Plc vs. Apple Inc | Aferian Plc vs. NVIDIA | Aferian Plc vs. Microsoft |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |