Correlation Between GlaxoSmithKline PLC and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bbh Intermediate 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 Bbh Intermediate 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 Bbh Intermediate Municipal, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bbh Intermediate 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 Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bbh Intermediate.
Diversification Opportunities for GlaxoSmithKline PLC and Bbh Intermediate
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GlaxoSmithKline and Bbh is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bbh Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Intermediate Mun 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 Bbh Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Intermediate Mun has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bbh Intermediate go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bbh Intermediate
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Bbh Intermediate. In addition to that, GlaxoSmithKline PLC is 5.52 times more volatile than Bbh Intermediate Municipal. It trades about -0.33 of its total potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.09 per unit of volatility. If you would invest 1,024 in Bbh Intermediate Municipal on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Bbh Intermediate Municipal or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bbh Intermediate Mun |
GlaxoSmithKline PLC and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bbh Intermediate
The main advantage of trading using opposite GlaxoSmithKline PLC and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bbh Intermediate 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 Bbh Intermediate will offset losses from the drop in Bbh Intermediate'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 |
| Bbh Intermediate vs. Bbh Limited Duration | Bbh Intermediate vs. Bbh Partner Fund | Bbh Intermediate vs. Bbh Intermediate Municipal | Bbh Intermediate vs. Bbh Partner Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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