Correlation Between GlaxoSmithKline PLC and Allianzgi Emerging
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Allianzgi Emerging 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 Allianzgi Emerging 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 Allianzgi Emerging Markets, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Allianzgi Emerging 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 Allianzgi Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Allianzgi Emerging.
Diversification Opportunities for GlaxoSmithKline PLC and Allianzgi Emerging
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Allianzgi is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Allianzgi Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Emerging 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 Allianzgi Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Emerging has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Allianzgi Emerging go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Allianzgi Emerging
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 3.89 times less return on investment than Allianzgi Emerging. In addition to that, GlaxoSmithKline PLC is 1.58 times more volatile than Allianzgi Emerging Markets. It trades about 0.01 of its total potential returns per unit of risk. Allianzgi Emerging Markets is currently generating about 0.05 per unit of volatility. If you would invest 2,476 in Allianzgi Emerging Markets on August 29, 2024 and sell it today you would earn a total of 526.00 from holding Allianzgi Emerging Markets or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Allianzgi Emerging Markets
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Allianzgi Emerging |
GlaxoSmithKline PLC and Allianzgi Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Allianzgi Emerging
The main advantage of trading using opposite GlaxoSmithKline PLC and Allianzgi Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Allianzgi Emerging 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 Allianzgi Emerging will offset losses from the drop in Allianzgi Emerging'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 |
| Allianzgi Emerging vs. Ultraemerging Markets Profund | Allianzgi Emerging vs. Allianzgi Nfj International | Allianzgi Emerging vs. Alger Global Growth | Allianzgi Emerging vs. Allianzgi Emerging Markets |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |