Correlation Between GlaxoSmithKline PLC and Dreyfus Global
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Dreyfus Global 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 Dreyfus Global 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 Dreyfus Global Emerging, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Dreyfus Global 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 Dreyfus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Dreyfus Global.
Diversification Opportunities for GlaxoSmithKline PLC and Dreyfus Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Dreyfus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Dreyfus Global Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Global Emerging 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 Dreyfus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Global Emerging has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Dreyfus Global go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Dreyfus Global
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Dreyfus Global. In addition to that, GlaxoSmithKline PLC is 1.74 times more volatile than Dreyfus Global Emerging. It trades about -0.25 of its total potential returns per unit of risk. Dreyfus Global Emerging is currently generating about 0.01 per unit of volatility. If you would invest 2,082 in Dreyfus Global Emerging on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Dreyfus Global Emerging or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Dreyfus Global Emerging
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Dreyfus Global Emerging |
GlaxoSmithKline PLC and Dreyfus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Dreyfus Global
The main advantage of trading using opposite GlaxoSmithKline PLC and Dreyfus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Dreyfus Global 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 Dreyfus Global will offset losses from the drop in Dreyfus Global'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 |
| Dreyfus Global vs. Evaluator Conservative Rms | Dreyfus Global vs. American Funds Conservative | Dreyfus Global vs. Adams Diversified Equity | Dreyfus Global vs. Lord Abbett Diversified |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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