Correlation Between GlaxoSmithKline PLC and Aya Gold
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Aya Gold 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 Aya Gold 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 Aya Gold Silver, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Aya Gold 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 Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Aya Gold.
Diversification Opportunities for GlaxoSmithKline PLC and Aya Gold
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between GlaxoSmithKline and Aya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver 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 Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Aya Gold go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Aya Gold
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.22 times more return on investment than Aya Gold. However, GlaxoSmithKline PLC ADR is 4.46 times less risky than Aya Gold. It trades about -0.23 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.21 per unit of risk. If you would invest 3,634 in GlaxoSmithKline PLC ADR on September 1, 2024 and sell it today you would lose (221.00) from holding GlaxoSmithKline PLC ADR or give up 6.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Aya Gold Silver
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Aya Gold Silver |
GlaxoSmithKline PLC and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Aya Gold
The main advantage of trading using opposite GlaxoSmithKline PLC and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold'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 |
| Aya Gold vs. First Majestic Silver | Aya Gold vs. Ivanhoe Energy | Aya Gold vs. Orezone Gold Corp | Aya Gold vs. Faraday Copper Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |