Correlation Between GlaxoSmithKline PLC and Mainstay Pinestone
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mainstay Pinestone 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 Mainstay Pinestone 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 Mainstay Pinestone International, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mainstay Pinestone 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 Mainstay Pinestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mainstay Pinestone.
Diversification Opportunities for GlaxoSmithKline PLC and Mainstay Pinestone
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Mainstay is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mainstay Pinestone Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Pinestone 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 Mainstay Pinestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Pinestone has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mainstay Pinestone go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mainstay Pinestone
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Mainstay Pinestone. In addition to that, GlaxoSmithKline PLC is 1.75 times more volatile than Mainstay Pinestone International. It trades about -0.12 of its total potential returns per unit of risk. Mainstay Pinestone International is currently generating about -0.01 per unit of volatility. If you would invest 1,674 in Mainstay Pinestone International on August 29, 2024 and sell it today you would lose (35.00) from holding Mainstay Pinestone International or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Mainstay Pinestone Internation
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mainstay Pinestone |
GlaxoSmithKline PLC and Mainstay Pinestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mainstay Pinestone
The main advantage of trading using opposite GlaxoSmithKline PLC and Mainstay Pinestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mainstay Pinestone 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 Mainstay Pinestone will offset losses from the drop in Mainstay Pinestone'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 |
| Mainstay Pinestone vs. Tiaa Cref Smallmid Cap Equity | Mainstay Pinestone vs. Small Cap Stock | Mainstay Pinestone vs. Lord Abbett Diversified | Mainstay Pinestone vs. Adams Diversified Equity |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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