Correlation Between GlaxoSmithKline PLC and Compal Electronics
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Compal Electronics 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 Compal Electronics 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 Compal Electronics GDR, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Compal Electronics 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 Compal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Compal Electronics.
Diversification Opportunities for GlaxoSmithKline PLC and Compal Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Compal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Compal Electronics GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compal Electronics GDR 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 Compal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compal Electronics GDR has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Compal Electronics go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Compal Electronics
If you would invest 310.00 in Compal Electronics GDR on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Compal Electronics GDR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Compal Electronics GDR
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Compal Electronics GDR |
GlaxoSmithKline PLC and Compal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Compal Electronics
The main advantage of trading using opposite GlaxoSmithKline PLC and Compal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Compal Electronics 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 Compal Electronics will offset losses from the drop in Compal Electronics' 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 |
| Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Samsung Electronics Co | Compal Electronics vs. Hyundai Motor | Compal Electronics vs. Toyota Motor Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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