Correlation Between GlaxoSmithKline PLC and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and EMvision Medical 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 EMvision Medical 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 EMvision Medical Devices, you can compare the effects of market volatilities on GlaxoSmithKline PLC and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and EMvision Medical.
Diversification Opportunities for GlaxoSmithKline PLC and EMvision Medical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and EMvision is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and EMvision Medical go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and EMvision Medical
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the EMvision Medical. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.6 times less risky than EMvision Medical. The stock trades about -0.23 of its potential returns per unit of risk. The EMvision Medical Devices is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 196.00 in EMvision Medical Devices on September 1, 2024 and sell it today you would earn a total of 2.00 from holding EMvision Medical Devices or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. EMvision Medical Devices
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| EMvision Medical Devices |
GlaxoSmithKline PLC and EMvision Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and EMvision Medical
The main advantage of trading using opposite GlaxoSmithKline PLC and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical'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 |
| EMvision Medical vs. Jupiter Energy | EMvision Medical vs. WA1 Resources | EMvision Medical vs. Cooper Metals | EMvision Medical vs. OD6 Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance |