Correlation Between GlaxoSmithKline PLC and AdvisorShares Gerber
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and AdvisorShares Gerber 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 AdvisorShares Gerber 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 AdvisorShares Gerber Kawasaki, you can compare the effects of market volatilities on GlaxoSmithKline PLC and AdvisorShares Gerber 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 AdvisorShares Gerber. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and AdvisorShares Gerber.
Diversification Opportunities for GlaxoSmithKline PLC and AdvisorShares Gerber
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and AdvisorShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and AdvisorShares Gerber Kawasaki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Gerber 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 AdvisorShares Gerber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Gerber has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and AdvisorShares Gerber go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and AdvisorShares Gerber
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the AdvisorShares Gerber. In addition to that, GlaxoSmithKline PLC is 1.24 times more volatile than AdvisorShares Gerber Kawasaki. It trades about -0.23 of its total potential returns per unit of risk. AdvisorShares Gerber Kawasaki is currently generating about 0.13 per unit of volatility. If you would invest 2,172 in AdvisorShares Gerber Kawasaki on August 31, 2024 and sell it today you would earn a total of 59.00 from holding AdvisorShares Gerber Kawasaki or generate 2.72% 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. AdvisorShares Gerber Kawasaki
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| AdvisorShares Gerber |
GlaxoSmithKline PLC and AdvisorShares Gerber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and AdvisorShares Gerber
The main advantage of trading using opposite GlaxoSmithKline PLC and AdvisorShares Gerber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, AdvisorShares Gerber 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 AdvisorShares Gerber will offset losses from the drop in AdvisorShares Gerber'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 |
| AdvisorShares Gerber vs. Vanguard Growth Index | AdvisorShares Gerber vs. iShares Russell 1000 | AdvisorShares Gerber vs. iShares SP 500 | AdvisorShares Gerber vs. SPDR Portfolio SP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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