Correlation Between GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR 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 HAPAG-LLOYD UNSPADR 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 HAPAG LLOYD UNSPADR 12, you can compare the effects of market volatilities on GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR 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 HAPAG-LLOYD UNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR.
Diversification Opportunities for GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and HAPAG-LLOYD is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and HAPAG LLOYD UNSPADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAPAG LLOYD UNSPADR 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 HAPAG-LLOYD UNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAPAG LLOYD UNSPADR has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 8.4 times less return on investment than HAPAG-LLOYD UNSPADR. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 3.39 times less risky than HAPAG-LLOYD UNSPADR. It trades about 0.01 of its potential returns per unit of risk. HAPAG LLOYD UNSPADR 12 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,826 in HAPAG LLOYD UNSPADR 12 on August 25, 2024 and sell it today you would earn a total of 1,374 from holding HAPAG LLOYD UNSPADR 12 or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.22% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. HAPAG LLOYD UNSPADR 12
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| HAPAG LLOYD UNSPADR |
GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR
The main advantage of trading using opposite GlaxoSmithKline PLC and HAPAG-LLOYD UNSPADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, HAPAG-LLOYD UNSPADR 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 HAPAG-LLOYD UNSPADR will offset losses from the drop in HAPAG-LLOYD UNSPADR'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 |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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