Correlation Between GlaxoSmithKline PLC and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Cohen Steers 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 Cohen Steers 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 Cohen Steers Prfrd, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Cohen Steers 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 Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Cohen Steers.
Diversification Opportunities for GlaxoSmithKline PLC and Cohen Steers
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Cohen is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Cohen Steers Prfrd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Prfrd 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Prfrd has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Cohen Steers go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Cohen Steers
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Cohen Steers. In addition to that, GlaxoSmithKline PLC is 8.88 times more volatile than Cohen Steers Prfrd. It trades about -0.23 of its total potential returns per unit of risk. Cohen Steers Prfrd is currently generating about 0.03 per unit of volatility. If you would invest 1,238 in Cohen Steers Prfrd on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Cohen Steers Prfrd or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Cohen Steers Prfrd
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Cohen Steers Prfrd |
GlaxoSmithKline PLC and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Cohen Steers
The main advantage of trading using opposite GlaxoSmithKline PLC and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' 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 |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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