Correlation Between GlaxoSmithKline PLC and Glaukos Corp
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Glaukos Corp 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 Glaukos Corp 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 Glaukos Corp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Glaukos Corp 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 Glaukos Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Glaukos Corp.
Diversification Opportunities for GlaxoSmithKline PLC and Glaukos Corp
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Glaukos is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Glaukos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaukos Corp 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 Glaukos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaukos Corp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Glaukos Corp go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Glaukos Corp
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 16.16 times less return on investment than Glaukos Corp. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 1.92 times less risky than Glaukos Corp. It trades about 0.01 of its potential returns per unit of risk. Glaukos Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,588 in Glaukos Corp on August 24, 2024 and sell it today you would earn a total of 9,495 from holding Glaukos Corp or generate 206.95% 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. Glaukos Corp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Glaukos Corp |
GlaxoSmithKline PLC and Glaukos Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Glaukos Corp
The main advantage of trading using opposite GlaxoSmithKline PLC and Glaukos Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Glaukos Corp 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 Glaukos Corp will offset losses from the drop in Glaukos Corp'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 |
| Glaukos Corp vs. Orthopediatrics Corp | Glaukos Corp vs. CONMED | Glaukos Corp vs. LivaNova PLC | Glaukos Corp vs. Paragon 28 |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |