Correlation Between GlaxoSmithKline PLC and Shelton Core
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Shelton Core 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 Shelton Core 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 Shelton E Value, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Shelton Core 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 Shelton Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Shelton Core.
Diversification Opportunities for GlaxoSmithKline PLC and Shelton Core
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GlaxoSmithKline and Shelton is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Shelton E Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton E Value 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 Shelton Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton E Value has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Shelton Core go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Shelton Core
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 2.45 times more return on investment than Shelton Core. However, GlaxoSmithKline PLC is 2.45 times more volatile than Shelton E Value. It trades about 0.14 of its potential returns per unit of risk. Shelton E Value is currently generating about 0.23 per unit of risk. If you would invest 3,365 in GlaxoSmithKline PLC ADR on October 31, 2024 and sell it today you would earn a total of 141.00 from holding GlaxoSmithKline PLC ADR or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Shelton E Value
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Shelton E Value |
GlaxoSmithKline PLC and Shelton Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Shelton Core
The main advantage of trading using opposite GlaxoSmithKline PLC and Shelton Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Shelton Core 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 Shelton Core will offset losses from the drop in Shelton Core'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 |
| Shelton Core vs. Sp Smallcap Index | Shelton Core vs. Sp Midcap Index | Shelton Core vs. Sp 500 Index | Shelton Core vs. Us Government Securities |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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