Correlation Between GlaxoSmithKline PLC and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Eaton Vance 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 Eaton Vance 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 Eaton Vance Large Cap, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Eaton Vance.
Diversification Opportunities for GlaxoSmithKline PLC and Eaton Vance
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Eaton is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Eaton Vance Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Large 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Large has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Eaton Vance go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Eaton Vance
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Eaton Vance. In addition to that, GlaxoSmithKline PLC is 1.63 times more volatile than Eaton Vance Large Cap. It trades about -0.3 of its total potential returns per unit of risk. Eaton Vance Large Cap is currently generating about 0.27 per unit of volatility. If you would invest 2,687 in Eaton Vance Large Cap on August 28, 2024 and sell it today you would earn a total of 134.00 from holding Eaton Vance Large Cap or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Eaton Vance Large Cap
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Eaton Vance Large |
GlaxoSmithKline PLC and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Eaton Vance
The main advantage of trading using opposite GlaxoSmithKline PLC and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |