Correlation Between GlaxoSmithKline PLC and Atour Lifestyle
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Atour Lifestyle 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 Atour Lifestyle 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 Atour Lifestyle Holdings, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Atour Lifestyle 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 Atour Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Atour Lifestyle.
Diversification Opportunities for GlaxoSmithKline PLC and Atour Lifestyle
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Atour is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Atour Lifestyle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atour Lifestyle Holdings 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 Atour Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atour Lifestyle Holdings has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Atour Lifestyle go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Atour Lifestyle
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 112.6 times less return on investment than Atour Lifestyle. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 2.97 times less risky than Atour Lifestyle. It trades about 0.0 of its potential returns per unit of risk. Atour Lifestyle Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Atour Lifestyle Holdings on August 27, 2024 and sell it today you would earn a total of 987.00 from holding Atour Lifestyle Holdings or generate 64.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Atour Lifestyle Holdings
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Atour Lifestyle Holdings |
GlaxoSmithKline PLC and Atour Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Atour Lifestyle
The main advantage of trading using opposite GlaxoSmithKline PLC and Atour Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Atour Lifestyle 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 Atour Lifestyle will offset losses from the drop in Atour Lifestyle'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 |
| Atour Lifestyle vs. InterContinental Hotels Group | Atour Lifestyle vs. GreenTree Hospitality Group | Atour Lifestyle vs. Hyatt Hotels | Atour Lifestyle vs. Choice Hotels International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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