Correlation Between GlaxoSmithKline PLC and Fast Ejendom
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Fast Ejendom 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 Fast Ejendom 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 Fast Ejendom, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Fast Ejendom 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 Fast Ejendom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Fast Ejendom.
Diversification Opportunities for GlaxoSmithKline PLC and Fast Ejendom
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Fast is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Fast Ejendom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Ejendom 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 Fast Ejendom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Ejendom has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Fast Ejendom go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Fast Ejendom
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Fast Ejendom. In addition to that, GlaxoSmithKline PLC is 1.33 times more volatile than Fast Ejendom. It trades about -0.31 of its total potential returns per unit of risk. Fast Ejendom is currently generating about -0.14 per unit of volatility. If you would invest 12,000 in Fast Ejendom on August 29, 2024 and sell it today you would lose (400.00) from holding Fast Ejendom or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Fast Ejendom
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Fast Ejendom |
GlaxoSmithKline PLC and Fast Ejendom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Fast Ejendom
The main advantage of trading using opposite GlaxoSmithKline PLC and Fast Ejendom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Fast Ejendom 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 Fast Ejendom will offset losses from the drop in Fast Ejendom'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 |
| Fast Ejendom vs. Jeudan | Fast Ejendom vs. Copenhagen Capital AS | Fast Ejendom vs. Cemat AS | Fast Ejendom vs. Movinn AS |
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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