Correlation Between GlaxoSmithKline PLC and Staude Capital
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Staude Capital 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 Staude Capital 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 Staude Capital Global, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Staude Capital 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 Staude Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Staude Capital.
Diversification Opportunities for GlaxoSmithKline PLC and Staude Capital
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Staude is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Staude Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staude Capital Global 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 Staude Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staude Capital Global has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Staude Capital go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Staude Capital
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 3.4 times less return on investment than Staude Capital. In addition to that, GlaxoSmithKline PLC is 1.18 times more volatile than Staude Capital Global. It trades about 0.02 of its total potential returns per unit of risk. Staude Capital Global is currently generating about 0.06 per unit of volatility. If you would invest 104.00 in Staude Capital Global on August 31, 2024 and sell it today you would earn a total of 27.00 from holding Staude Capital Global or generate 25.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Staude Capital Global
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Staude Capital Global |
GlaxoSmithKline PLC and Staude Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Staude Capital
The main advantage of trading using opposite GlaxoSmithKline PLC and Staude Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Staude Capital 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 Staude Capital will offset losses from the drop in Staude Capital'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 |
| Staude Capital vs. TTG Fintech | Staude Capital vs. Readytech Holdings | Staude Capital vs. Thorney Technologies | Staude Capital vs. Macquarie Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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