Correlation Between GlaxoSmithKline PLC and Atom Empreendimentos
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Atom Empreendimentos 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 Atom Empreendimentos 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 Atom Empreendimentos e, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Atom Empreendimentos 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 Atom Empreendimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Atom Empreendimentos.
Diversification Opportunities for GlaxoSmithKline PLC and Atom Empreendimentos
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Atom is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Atom Empreendimentos e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atom Empreendimentos 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 Atom Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atom Empreendimentos has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Atom Empreendimentos go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Atom Empreendimentos
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Atom Empreendimentos. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 6.78 times less risky than Atom Empreendimentos. The stock trades about -0.23 of its potential returns per unit of risk. The Atom Empreendimentos e is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 399.00 in Atom Empreendimentos e on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Atom Empreendimentos e or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Atom Empreendimentos e
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Atom Empreendimentos |
GlaxoSmithKline PLC and Atom Empreendimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Atom Empreendimentos
The main advantage of trading using opposite GlaxoSmithKline PLC and Atom Empreendimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Atom Empreendimentos 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 Atom Empreendimentos will offset losses from the drop in Atom Empreendimentos' 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 |
| Atom Empreendimentos vs. Lupatech SA | Atom Empreendimentos vs. Triunfo Participaes e | Atom Empreendimentos vs. Viver Incorporadora e | Atom Empreendimentos vs. Bombril SA |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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