Correlation Between GlaxoSmithKline PLC and Boat Rocker
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Boat Rocker 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 Boat Rocker 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 Boat Rocker Media, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Boat Rocker 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 Boat Rocker. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Boat Rocker.
Diversification Opportunities for GlaxoSmithKline PLC and Boat Rocker
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Boat is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Boat Rocker Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boat Rocker Media 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 Boat Rocker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boat Rocker Media has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Boat Rocker go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Boat Rocker
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.31 times more return on investment than Boat Rocker. However, GlaxoSmithKline PLC ADR is 3.27 times less risky than Boat Rocker. It trades about 0.02 of its potential returns per unit of risk. Boat Rocker Media is currently generating about -0.05 per unit of risk. If you would invest 3,274 in GlaxoSmithKline PLC ADR on August 28, 2024 and sell it today you would earn a total of 141.00 from holding GlaxoSmithKline PLC ADR or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.44% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Boat Rocker Media
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Boat Rocker Media |
GlaxoSmithKline PLC and Boat Rocker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Boat Rocker
The main advantage of trading using opposite GlaxoSmithKline PLC and Boat Rocker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Boat Rocker 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 Boat Rocker will offset losses from the drop in Boat Rocker'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 |
| Boat Rocker vs. Thunderbird Entertainment Group | Boat Rocker vs. VerticalScope Holdings | Boat Rocker vs. WildBrain | Boat Rocker vs. Kits Eyecare |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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