Correlation Between GlaxoSmithKline PLC and Henderson Land
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Henderson Land 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 Henderson Land 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 Henderson Land, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Henderson Land 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 Henderson Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Henderson Land.
Diversification Opportunities for GlaxoSmithKline PLC and Henderson Land
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Henderson is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Henderson Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Land 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 Henderson Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Land has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Henderson Land go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Henderson Land
If you would invest 290.00 in Henderson Land on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Henderson Land or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Henderson Land
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Henderson Land |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Henderson Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Henderson Land
The main advantage of trading using opposite GlaxoSmithKline PLC and Henderson Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Henderson Land 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 Henderson Land will offset losses from the drop in Henderson Land'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 |
| Henderson Land vs. St Joe Company | Henderson Land vs. Stratus Properties | Henderson Land vs. Mitsui Fudosan Co | Henderson Land vs. New World Development |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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