Correlation Between GlaxoSmithKline PLC and AMREP
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and AMREP 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 AMREP 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 AMREP, you can compare the effects of market volatilities on GlaxoSmithKline PLC and AMREP 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 AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and AMREP.
Diversification Opportunities for GlaxoSmithKline PLC and AMREP
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and AMREP is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and AMREP go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and AMREP
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the AMREP. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.8 times less risky than AMREP. The stock trades about -0.24 of its potential returns per unit of risk. The AMREP is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,175 in AMREP on August 30, 2024 and sell it today you would earn a total of 1,365 from holding AMREP or generate 62.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. AMREP
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| AMREP |
GlaxoSmithKline PLC and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and AMREP
The main advantage of trading using opposite GlaxoSmithKline PLC and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP'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 |
| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |