Correlation Between GlaxoSmithKline PLC and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Salient Tactical 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 Salient Tactical 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 Salient Tactical Growth, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Salient Tactical 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 Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Salient Tactical.
Diversification Opportunities for GlaxoSmithKline PLC and Salient Tactical
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Salient is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Salient Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Growth 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 Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Growth has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Salient Tactical go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Salient Tactical
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Salient Tactical. In addition to that, GlaxoSmithKline PLC is 2.4 times more volatile than Salient Tactical Growth. It trades about -0.31 of its total potential returns per unit of risk. Salient Tactical Growth is currently generating about 0.13 per unit of volatility. If you would invest 2,064 in Salient Tactical Growth on August 26, 2024 and sell it today you would earn a total of 33.00 from holding Salient Tactical Growth or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Salient Tactical Growth
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Salient Tactical Growth |
GlaxoSmithKline PLC and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Salient Tactical
The main advantage of trading using opposite GlaxoSmithKline PLC and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Salient Tactical 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 Salient Tactical will offset losses from the drop in Salient Tactical'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 |
| Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus | Salient Tactical vs. Salient Tactical Plus |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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