Correlation Between GlaxoSmithKline PLC and Focus Impact
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Focus Impact 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 Focus Impact 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 Focus Impact Acquisition, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Focus Impact 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 Focus Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Focus Impact.
Diversification Opportunities for GlaxoSmithKline PLC and Focus Impact
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Focus is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Focus Impact Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Impact Acquisition 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 Focus Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Impact Acquisition has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Focus Impact go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Focus Impact
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.03 times more return on investment than Focus Impact. However, GlaxoSmithKline PLC ADR is 33.87 times less risky than Focus Impact. It trades about -0.3 of its potential returns per unit of risk. Focus Impact Acquisition is currently generating about -0.09 per unit of risk. If you would invest 3,745 in GlaxoSmithKline PLC ADR on August 28, 2024 and sell it today you would lose (330.00) from holding GlaxoSmithKline PLC ADR or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.62% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Focus Impact Acquisition
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Focus Impact Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Focus Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Focus Impact
The main advantage of trading using opposite GlaxoSmithKline PLC and Focus Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Focus Impact 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 Focus Impact will offset losses from the drop in Focus Impact'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 |
| Focus Impact vs. ClimateRock Class A | Focus Impact vs. AlphaVest Acquisition Corp | Focus Impact vs. Golden Star Acquisition | Focus Impact vs. Portage Fintech Acquisition |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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