Correlation Between GlaxoSmithKline PLC and Guggenheim Floating
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Guggenheim Floating 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 Guggenheim Floating 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 Guggenheim Floating Rate, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Guggenheim Floating 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 Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Guggenheim Floating.
Diversification Opportunities for GlaxoSmithKline PLC and Guggenheim Floating
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Guggenheim is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Guggenheim Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Floating Rate 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 Guggenheim Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Floating Rate has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Guggenheim Floating go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Guggenheim Floating
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 1.7 times less return on investment than Guggenheim Floating. In addition to that, GlaxoSmithKline PLC is 8.27 times more volatile than Guggenheim Floating Rate. It trades about 0.01 of its total potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.19 per unit of volatility. If you would invest 2,187 in Guggenheim Floating Rate on August 26, 2024 and sell it today you would earn a total of 238.00 from holding Guggenheim Floating Rate or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Guggenheim Floating Rate
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Guggenheim Floating Rate |
GlaxoSmithKline PLC and Guggenheim Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Guggenheim Floating
The main advantage of trading using opposite GlaxoSmithKline PLC and Guggenheim Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Guggenheim Floating 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 Guggenheim Floating will offset losses from the drop in Guggenheim Floating'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 |
| Guggenheim Floating vs. Prudential Health Sciences | Guggenheim Floating vs. The Gabelli Healthcare | Guggenheim Floating vs. Hartford Healthcare Hls | Guggenheim Floating vs. Lord Abbett Health |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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