Correlation Between GlaxoSmithKline PLC and FTAC Emerald
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and FTAC Emerald 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 FTAC Emerald 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 FTAC Emerald Acquisition, you can compare the effects of market volatilities on GlaxoSmithKline PLC and FTAC Emerald 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 FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and FTAC Emerald.
Diversification Opportunities for GlaxoSmithKline PLC and FTAC Emerald
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and FTAC is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and FTAC Emerald Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAC Emerald 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 FTAC Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAC Emerald Acquisition has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and FTAC Emerald go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and FTAC Emerald
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the FTAC Emerald. In addition to that, GlaxoSmithKline PLC is 3.5 times more volatile than FTAC Emerald Acquisition. It trades about 0.0 of its total potential returns per unit of risk. FTAC Emerald Acquisition is currently generating about 0.08 per unit of volatility. If you would invest 1,051 in FTAC Emerald Acquisition on August 29, 2024 and sell it today you would earn a total of 78.00 from holding FTAC Emerald Acquisition or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. FTAC Emerald Acquisition
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| FTAC Emerald Acquisition |
GlaxoSmithKline PLC and FTAC Emerald Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and FTAC Emerald
The main advantage of trading using opposite GlaxoSmithKline PLC and FTAC Emerald positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, FTAC Emerald 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 FTAC Emerald will offset losses from the drop in FTAC Emerald'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 |
| FTAC Emerald vs. Canlan Ice Sports | FTAC Emerald vs. NETGEAR | FTAC Emerald vs. Brunswick | FTAC Emerald vs. Weibo Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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