Correlation Between GlaxoSmithKline PLC and Apollo Bancorp
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Apollo Bancorp 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 Apollo Bancorp 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 Apollo Bancorp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Apollo Bancorp 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 Apollo Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Apollo Bancorp.
Diversification Opportunities for GlaxoSmithKline PLC and Apollo Bancorp
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Apollo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Apollo Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Bancorp 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 Apollo Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Bancorp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Apollo Bancorp go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Apollo Bancorp
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Apollo Bancorp. In addition to that, GlaxoSmithKline PLC is 2.37 times more volatile than Apollo Bancorp. It trades about -0.23 of its total potential returns per unit of risk. Apollo Bancorp is currently generating about -0.05 per unit of volatility. If you would invest 3,721 in Apollo Bancorp on September 1, 2024 and sell it today you would lose (21.00) from holding Apollo Bancorp or give up 0.56% 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. Apollo Bancorp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Apollo Bancorp |
GlaxoSmithKline PLC and Apollo Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Apollo Bancorp
The main advantage of trading using opposite GlaxoSmithKline PLC and Apollo Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Apollo Bancorp 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 Apollo Bancorp will offset losses from the drop in Apollo Bancorp'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 |
| Apollo Bancorp vs. Bank Mandiri Persero | Apollo Bancorp vs. Piraeus Bank SA | Apollo Bancorp vs. Kasikornbank Public Co | Apollo Bancorp vs. Turkiye Garanti Bankasi |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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