Correlation Between GlaxoSmithKline PLC and Bowmo
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bowmo 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 Bowmo 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 Bowmo Inc, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bowmo 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 Bowmo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bowmo.
Diversification Opportunities for GlaxoSmithKline PLC and Bowmo
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Bowmo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bowmo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowmo Inc 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 Bowmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowmo Inc has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bowmo go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bowmo
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Bowmo. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 36.29 times less risky than Bowmo. The stock trades about -0.33 of its potential returns per unit of risk. The Bowmo Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.18 in Bowmo Inc on August 27, 2024 and sell it today you would earn a total of 0.07 from holding Bowmo Inc or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Bowmo Inc
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bowmo Inc |
GlaxoSmithKline PLC and Bowmo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bowmo
The main advantage of trading using opposite GlaxoSmithKline PLC and Bowmo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bowmo 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 Bowmo will offset losses from the drop in Bowmo'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 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |