Correlation Between GlaxoSmithKline PLC and Bellerophon Therapeutics
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bellerophon Therapeutics 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 Bellerophon Therapeutics 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 Bellerophon Therapeutics, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bellerophon Therapeutics 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 Bellerophon Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bellerophon Therapeutics.
Diversification Opportunities for GlaxoSmithKline PLC and Bellerophon Therapeutics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GlaxoSmithKline and Bellerophon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bellerophon Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellerophon Therapeutics 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 Bellerophon Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellerophon Therapeutics has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bellerophon Therapeutics go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bellerophon Therapeutics
If you would invest 71.00 in Bellerophon Therapeutics on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Bellerophon Therapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Bellerophon Therapeutics
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bellerophon Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Bellerophon Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bellerophon Therapeutics
The main advantage of trading using opposite GlaxoSmithKline PLC and Bellerophon Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bellerophon Therapeutics 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 Bellerophon Therapeutics will offset losses from the drop in Bellerophon Therapeutics' 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 |
| Bellerophon Therapeutics vs. Bio Path Holdings | Bellerophon Therapeutics vs. Capricor Therapeutics | Bellerophon Therapeutics vs. NextCure | Bellerophon Therapeutics vs. Zura Bio Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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