Correlation Between GlaxoSmithKline PLC and American Security
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and American Security 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 American Security 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 American Security Resources, you can compare the effects of market volatilities on GlaxoSmithKline PLC and American Security 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 American Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and American Security.
Diversification Opportunities for GlaxoSmithKline PLC and American Security
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and American Security Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Security 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 American Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Security has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and American Security go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and American Security
If you would invest 0.01 in American Security Resources on August 30, 2024 and sell it today you would earn a total of 0.00 from holding American Security Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. American Security Resources
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| American Security |
GlaxoSmithKline PLC and American Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and American Security
The main advantage of trading using opposite GlaxoSmithKline PLC and American Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, American Security 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 American Security will offset losses from the drop in American Security'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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