Correlation Between GlaxoSmithKline PLC and Era
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Era 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 Era 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 Era Group, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Era 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 Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Era.
Diversification Opportunities for GlaxoSmithKline PLC and Era
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Era is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Era Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Group 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 Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Group has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Era go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Era
If you would invest (100.00) in Era Group on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Era Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Era Group
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Era Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Era Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Era
The main advantage of trading using opposite GlaxoSmithKline PLC and Era positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Era 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 Era will offset losses from the drop in Era'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 |
| Era vs. Black Hills | Era vs. Sun Life Financial | Era vs. Reservoir Media | Era vs. CapitaLand Investment Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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