Correlation Between GlaxoSmithKline PLC and Bangkok Land
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bangkok Land 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 Bangkok Land 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 Bangkok Land Public, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bangkok Land 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 Bangkok Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bangkok Land.
Diversification Opportunities for GlaxoSmithKline PLC and Bangkok Land
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Bangkok is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bangkok Land Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Land 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 Bangkok Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Land Public has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bangkok Land go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bangkok Land
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Bangkok Land. In addition to that, GlaxoSmithKline PLC is 1.3 times more volatile than Bangkok Land Public. It trades about -0.3 of its total potential returns per unit of risk. Bangkok Land Public is currently generating about -0.06 per unit of volatility. If you would invest 61.00 in Bangkok Land Public on August 25, 2024 and sell it today you would lose (1.00) from holding Bangkok Land Public or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Bangkok Land Public
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bangkok Land Public |
GlaxoSmithKline PLC and Bangkok Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bangkok Land
The main advantage of trading using opposite GlaxoSmithKline PLC and Bangkok Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bangkok Land 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 Bangkok Land will offset losses from the drop in Bangkok Land'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 |
| Bangkok Land vs. Siri Prime Office | Bangkok Land vs. WHA Public | Bangkok Land vs. Supalai Public | Bangkok Land vs. Quality Houses Public |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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