Correlation Between GlaxoSmithKline PLC and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Bitwise Funds 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 Bitwise Funds 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 Bitwise Funds Trust, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Bitwise Funds 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 Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Bitwise Funds.
Diversification Opportunities for GlaxoSmithKline PLC and Bitwise Funds
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Bitwise is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust 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 Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Bitwise Funds go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Bitwise Funds
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Bitwise Funds. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.3 times less risky than Bitwise Funds. The stock trades about -0.24 of its potential returns per unit of risk. The Bitwise Funds Trust is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,142 in Bitwise Funds Trust on August 26, 2024 and sell it today you would earn a total of 1,684 from holding Bitwise Funds Trust or generate 40.66% 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. Bitwise Funds Trust
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Bitwise Funds Trust |
GlaxoSmithKline PLC and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Bitwise Funds
The main advantage of trading using opposite GlaxoSmithKline PLC and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Bitwise Funds 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 Bitwise Funds will offset losses from the drop in Bitwise Funds' 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 |
| Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. iShares Ethereum Trust | Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. Grayscale Ethereum Trust |
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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