Correlation Between GlaxoSmithKline PLC and Bausch Lomb
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bausch Lomb 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 Bausch Lomb 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 Bausch Lomb Corp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bausch Lomb 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 Bausch Lomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bausch Lomb.
Diversification Opportunities for GlaxoSmithKline PLC and Bausch Lomb
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Bausch is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bausch Lomb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Lomb Corp 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 Bausch Lomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Lomb Corp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bausch Lomb go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bausch Lomb
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Bausch Lomb. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.54 times less risky than Bausch Lomb. The stock trades about -0.11 of its potential returns per unit of risk. The Bausch Lomb Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,539 in Bausch Lomb Corp on August 28, 2024 and sell it today you would earn a total of 428.00 from holding Bausch Lomb Corp or generate 27.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Bausch Lomb Corp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bausch Lomb Corp |
GlaxoSmithKline PLC and Bausch Lomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bausch Lomb
The main advantage of trading using opposite GlaxoSmithKline PLC and Bausch Lomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bausch Lomb 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 Bausch Lomb will offset losses from the drop in Bausch Lomb'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 |
| Bausch Lomb vs. The Cooper Companies, | Bausch Lomb vs. ICU Medical | Bausch Lomb vs. Hologic | Bausch Lomb vs. Becton Dickinson 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |