Correlation Between GlaxoSmithKline PLC and Flexopack Socit
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Flexopack Socit 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 Flexopack Socit 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 Flexopack Socit Anonyme, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Flexopack Socit 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 Flexopack Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Flexopack Socit.
Diversification Opportunities for GlaxoSmithKline PLC and Flexopack Socit
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Flexopack is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Flexopack Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexopack Socit Anonyme 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 Flexopack Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexopack Socit Anonyme has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Flexopack Socit go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Flexopack Socit
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Flexopack Socit. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.5 times less risky than Flexopack Socit. The stock trades about -0.23 of its potential returns per unit of risk. The Flexopack Socit Anonyme is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 805.00 in Flexopack Socit Anonyme on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Flexopack Socit Anonyme or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Flexopack Socit Anonyme
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Flexopack Socit Anonyme |
GlaxoSmithKline PLC and Flexopack Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Flexopack Socit
The main advantage of trading using opposite GlaxoSmithKline PLC and Flexopack Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Flexopack Socit 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 Flexopack Socit will offset losses from the drop in Flexopack Socit'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 |
| Flexopack Socit vs. National Bank of | Flexopack Socit vs. EL D Mouzakis | Flexopack Socit vs. Lampsa Hellenic Hotels | Flexopack Socit vs. Austriacard Holdings AG |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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