Correlation Between GlaxoSmithKline PLC and Bergman Beving
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bergman Beving 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 Bergman Beving 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 Bergman Beving AB, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bergman Beving 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 Bergman Beving. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bergman Beving.
Diversification Opportunities for GlaxoSmithKline PLC and Bergman Beving
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GlaxoSmithKline and Bergman is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bergman Beving AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergman Beving AB 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 Bergman Beving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergman Beving AB has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bergman Beving go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bergman Beving
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Bergman Beving. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.48 times less risky than Bergman Beving. The stock trades about -0.25 of its potential returns per unit of risk. The Bergman Beving AB is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 31,800 in Bergman Beving AB on August 30, 2024 and sell it today you would lose (4,450) from holding Bergman Beving AB or give up 13.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Bergman Beving AB
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bergman Beving AB |
GlaxoSmithKline PLC and Bergman Beving Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bergman Beving
The main advantage of trading using opposite GlaxoSmithKline PLC and Bergman Beving positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bergman Beving 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 Bergman Beving will offset losses from the drop in Bergman Beving'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 |
| Bergman Beving vs. Lagercrantz Group AB | Bergman Beving vs. Addtech AB | Bergman Beving vs. AddLife AB | Bergman Beving vs. Bufab Holding AB |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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