Correlation Between GlaxoSmithKline PLC and Galaxy Digital
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Galaxy Digital 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 Galaxy Digital 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 Galaxy Digital Holdings, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Galaxy Digital 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 Galaxy Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Galaxy Digital.
Diversification Opportunities for GlaxoSmithKline PLC and Galaxy Digital
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Galaxy is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Galaxy Digital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Digital Holdings 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 Galaxy Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Digital Holdings has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Galaxy Digital go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Galaxy Digital
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Galaxy Digital. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 6.3 times less risky than Galaxy Digital. The stock trades about -0.24 of its potential returns per unit of risk. The Galaxy Digital Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,360 in Galaxy Digital Holdings on August 31, 2024 and sell it today you would earn a total of 450.00 from holding Galaxy Digital Holdings or generate 33.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Galaxy Digital Holdings
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Galaxy Digital Holdings |
GlaxoSmithKline PLC and Galaxy Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Galaxy Digital
The main advantage of trading using opposite GlaxoSmithKline PLC and Galaxy Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Galaxy Digital 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 Galaxy Digital will offset losses from the drop in Galaxy Digital'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 |
| Galaxy Digital vs. DeFi Technologies | Galaxy Digital vs. Argo Blockchain PLC | Galaxy Digital vs. BIG Blockchain Intelligence | Galaxy Digital vs. Dmg Blockchain Solutions |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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