Correlation Between GlaxoSmithKline PLC and Eaton Vance

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Eaton Vance 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 Eaton Vance 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 Eaton Vance South, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Eaton Vance.

Diversification Opportunities for GlaxoSmithKline PLC and Eaton Vance

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between GlaxoSmithKline and Eaton is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Eaton Vance South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance South 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance South has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Eaton Vance go up and down completely randomly.

Pair Corralation between GlaxoSmithKline PLC and Eaton Vance

Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 1.3 times less return on investment than Eaton Vance. In addition to that, GlaxoSmithKline PLC is 6.03 times more volatile than Eaton Vance South. It trades about 0.01 of its total potential returns per unit of risk. Eaton Vance South is currently generating about 0.05 per unit of volatility. If you would invest  877.00  in Eaton Vance South on August 28, 2024 and sell it today you would earn a total of  47.00  from holding Eaton Vance South or generate 5.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

GlaxoSmithKline PLC ADR  vs.  Eaton Vance South

 Performance 
       Timeline  
GlaxoSmithKline PLC ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GlaxoSmithKline PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Eaton Vance South 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance South are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GlaxoSmithKline PLC and Eaton Vance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GlaxoSmithKline PLC and Eaton Vance

The main advantage of trading using opposite GlaxoSmithKline PLC and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.
The idea behind GlaxoSmithKline PLC ADR and Eaton Vance South pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Technical Analysis
Check basic technical indicators and analysis based on most latest market data