Correlation Between GlaxoSmithKline PLC and Essity AB
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By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Essity AB, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Essity AB 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 Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Essity AB.
Diversification Opportunities for GlaxoSmithKline PLC and Essity AB
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GlaxoSmithKline and Essity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB 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 Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Essity AB go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Essity AB
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 4.27 times less return on investment than Essity AB. In addition to that, GlaxoSmithKline PLC is 1.0 times more volatile than Essity AB. It trades about 0.01 of its total potential returns per unit of risk. Essity AB is currently generating about 0.04 per unit of volatility. If you would invest 25,177 in Essity AB on August 29, 2024 and sell it today you would earn a total of 5,273 from holding Essity AB or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Essity AB
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Essity AB |
GlaxoSmithKline PLC and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Essity AB
The main advantage of trading using opposite GlaxoSmithKline PLC and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Essity AB 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 Essity AB will offset losses from the drop in Essity AB'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 |
| Essity AB vs. Essity AB | Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. Industrivarden AB ser | Essity AB vs. Svenska Cellulosa Aktiebolaget |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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