Correlation Between GlaxoSmithKline PLC and Emmi AG
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Emmi AG 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 Emmi AG 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 Emmi AG, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Emmi AG 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 Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Emmi AG.
Diversification Opportunities for GlaxoSmithKline PLC and Emmi AG
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GlaxoSmithKline and Emmi is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG 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 Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Emmi AG go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Emmi AG
If you would invest 99,000 in Emmi AG on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Emmi AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Emmi AG
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Emmi AG |
GlaxoSmithKline PLC and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Emmi AG
The main advantage of trading using opposite GlaxoSmithKline PLC and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Emmi AG 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 Emmi AG will offset losses from the drop in Emmi AG'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 |
| Emmi AG vs. Kikkoman Corp ADR | Emmi AG vs. Kerry Group PLC | Emmi AG vs. Associated British Foods | Emmi AG vs. Nestle SA ADR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |