Correlation Between GlaxoSmithKline PLC and Endur ASA
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Endur ASA 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 Endur ASA 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 Endur ASA, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Endur ASA 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 Endur ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Endur ASA.
Diversification Opportunities for GlaxoSmithKline PLC and Endur ASA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Endur is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Endur ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endur ASA 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 Endur ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endur ASA has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Endur ASA go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Endur ASA
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Endur ASA. In addition to that, GlaxoSmithKline PLC is 1.35 times more volatile than Endur ASA. It trades about -0.31 of its total potential returns per unit of risk. Endur ASA is currently generating about 0.28 per unit of volatility. If you would invest 5,920 in Endur ASA on August 29, 2024 and sell it today you would earn a total of 380.00 from holding Endur ASA or generate 6.42% 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. Endur ASA
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Endur ASA |
GlaxoSmithKline PLC and Endur ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Endur ASA
The main advantage of trading using opposite GlaxoSmithKline PLC and Endur ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Endur ASA 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 Endur ASA will offset losses from the drop in Endur ASA'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 |
| Endur ASA vs. Magnora ASA | Endur ASA vs. Next Biometrics Group | Endur ASA vs. Idex ASA | Endur ASA vs. Eidesvik Offshore ASA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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