Correlation Between GlaxoSmithKline PLC and Mainstay Fiera
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mainstay Fiera 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 Mainstay Fiera 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 Mainstay Fiera Smid, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mainstay Fiera 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 Mainstay Fiera. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mainstay Fiera.
Diversification Opportunities for GlaxoSmithKline PLC and Mainstay Fiera
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Mainstay is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mainstay Fiera Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Fiera Smid 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 Mainstay Fiera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Fiera Smid has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mainstay Fiera go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mainstay Fiera
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 6.43 times less return on investment than Mainstay Fiera. In addition to that, GlaxoSmithKline PLC is 1.17 times more volatile than Mainstay Fiera Smid. It trades about 0.01 of its total potential returns per unit of risk. Mainstay Fiera Smid is currently generating about 0.05 per unit of volatility. If you would invest 1,558 in Mainstay Fiera Smid on August 28, 2024 and sell it today you would earn a total of 274.00 from holding Mainstay Fiera Smid or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 68.69% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Mainstay Fiera Smid
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mainstay Fiera Smid |
GlaxoSmithKline PLC and Mainstay Fiera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mainstay Fiera
The main advantage of trading using opposite GlaxoSmithKline PLC and Mainstay Fiera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mainstay Fiera 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 Mainstay Fiera will offset losses from the drop in Mainstay Fiera'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 |
| Mainstay Fiera vs. Mainstay High Yield | Mainstay Fiera vs. Mainstay Tax Free | Mainstay Fiera vs. Mainstay Income Builder | Mainstay Fiera vs. Mainstay Large Cap |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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