Correlation Between GlaxoSmithKline PLC and BCPG Public
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and BCPG Public 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 BCPG Public 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 BCPG Public, you can compare the effects of market volatilities on GlaxoSmithKline PLC and BCPG Public 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 BCPG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and BCPG Public.
Diversification Opportunities for GlaxoSmithKline PLC and BCPG Public
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GlaxoSmithKline and BCPG is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and BCPG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCPG Public 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 BCPG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCPG Public has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and BCPG Public go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and BCPG Public
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.66 times more return on investment than BCPG Public. However, GlaxoSmithKline PLC ADR is 1.53 times less risky than BCPG Public. It trades about 0.0 of its potential returns per unit of risk. BCPG Public is currently generating about -0.07 per unit of risk. If you would invest 3,524 in GlaxoSmithKline PLC ADR on August 29, 2024 and sell it today you would lose (122.00) from holding GlaxoSmithKline PLC ADR or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.98% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. BCPG Public
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| BCPG Public |
GlaxoSmithKline PLC and BCPG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and BCPG Public
The main advantage of trading using opposite GlaxoSmithKline PLC and BCPG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, BCPG Public 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 BCPG Public will offset losses from the drop in BCPG Public'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 |
| BCPG Public vs. WHA Public | BCPG Public vs. Global Power Synergy | BCPG Public vs. TPI Polene Power | BCPG Public vs. Bangkok Expressway and |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |