Correlation Between GlaxoSmithKline PLC and Mfs Blended
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mfs Blended 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 Mfs Blended 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 Mfs Blended Research, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mfs Blended 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 Mfs Blended. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mfs Blended.
Diversification Opportunities for GlaxoSmithKline PLC and Mfs Blended
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Mfs is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mfs Blended Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Blended Research 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 Mfs Blended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Blended Research has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mfs Blended go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mfs Blended
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Mfs Blended. In addition to that, GlaxoSmithKline PLC is 1.38 times more volatile than Mfs Blended Research. It trades about -0.25 of its total potential returns per unit of risk. Mfs Blended Research is currently generating about 0.15 per unit of volatility. If you would invest 2,348 in Mfs Blended Research on August 28, 2024 and sell it today you would earn a total of 233.00 from holding Mfs Blended Research or generate 9.92% 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. Mfs Blended Research
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mfs Blended Research |
GlaxoSmithKline PLC and Mfs Blended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mfs Blended
The main advantage of trading using opposite GlaxoSmithKline PLC and Mfs Blended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mfs Blended 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 Mfs Blended will offset losses from the drop in Mfs Blended'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 |
| Mfs Blended vs. Mfs Value Fund | Mfs Blended vs. Mfs International Value | Mfs Blended vs. Mfs International Diversification | Mfs Blended vs. John Hancock Disciplined |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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