Correlation Between GlaxoSmithKline PLC and Haoxi Health
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Haoxi Health 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 Haoxi Health 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 Haoxi Health Technology, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Haoxi Health 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 Haoxi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Haoxi Health.
Diversification Opportunities for GlaxoSmithKline PLC and Haoxi Health
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Haoxi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Haoxi Health Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haoxi Health Technology 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 Haoxi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haoxi Health Technology has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Haoxi Health go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Haoxi Health
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.11 times more return on investment than Haoxi Health. However, GlaxoSmithKline PLC ADR is 9.42 times less risky than Haoxi Health. It trades about -0.24 of its potential returns per unit of risk. Haoxi Health Technology is currently generating about -0.25 per unit of risk. If you would invest 4,341 in GlaxoSmithKline PLC ADR on August 30, 2024 and sell it today you would lose (908.00) from holding GlaxoSmithKline PLC ADR or give up 20.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Haoxi Health Technology
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Haoxi Health Technology |
GlaxoSmithKline PLC and Haoxi Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Haoxi Health
The main advantage of trading using opposite GlaxoSmithKline PLC and Haoxi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Haoxi Health 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 Haoxi Health will offset losses from the drop in Haoxi Health'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 |
| Haoxi Health vs. Zillow Group Class | Haoxi Health vs. Ucommune International | Haoxi Health vs. Global Mofy Metaverse | Haoxi Health vs. Olo Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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