Correlation Between GlaxoSmithKline PLC and Galaxy Gaming
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Galaxy Gaming 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 Galaxy Gaming 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 Galaxy Gaming, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Galaxy Gaming 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 Galaxy Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Galaxy Gaming.
Diversification Opportunities for GlaxoSmithKline PLC and Galaxy Gaming
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Galaxy is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Galaxy Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Gaming 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 Galaxy Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Gaming has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Galaxy Gaming go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Galaxy Gaming
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 18.15 times less return on investment than Galaxy Gaming. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 4.34 times less risky than Galaxy Gaming. It trades about 0.01 of its potential returns per unit of risk. Galaxy Gaming is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 240.00 in Galaxy Gaming on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Galaxy Gaming or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Galaxy Gaming
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Galaxy Gaming |
GlaxoSmithKline PLC and Galaxy Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Galaxy Gaming
The main advantage of trading using opposite GlaxoSmithKline PLC and Galaxy Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Galaxy Gaming 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 Galaxy Gaming will offset losses from the drop in Galaxy Gaming'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 |
| Galaxy Gaming vs. Intema Solutions | Galaxy Gaming vs. 888 Holdings | Galaxy Gaming vs. Royal Wins | Galaxy Gaming vs. Real Luck Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |