Correlation Between GlaxoSmithKline PLC and Cadeler As
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Cadeler As 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 Cadeler As 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 Cadeler As, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Cadeler As 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 Cadeler As. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Cadeler As.
Diversification Opportunities for GlaxoSmithKline PLC and Cadeler As
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Cadeler is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Cadeler As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler As 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 Cadeler As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler As has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Cadeler As go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Cadeler As
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.83 times more return on investment than Cadeler As. However, GlaxoSmithKline PLC ADR is 1.21 times less risky than Cadeler As. It trades about -0.33 of its potential returns per unit of risk. Cadeler As is currently generating about -0.29 per unit of risk. If you would invest 3,731 in GlaxoSmithKline PLC ADR on August 25, 2024 and sell it today you would lose (361.00) from holding GlaxoSmithKline PLC ADR or give up 9.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Cadeler As
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Cadeler As |
GlaxoSmithKline PLC and Cadeler As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Cadeler As
The main advantage of trading using opposite GlaxoSmithKline PLC and Cadeler As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Cadeler As 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 Cadeler As will offset losses from the drop in Cadeler As' 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |