Correlation Between GlaxoSmithKline PLC and HempAmericana
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and HempAmericana 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 HempAmericana 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 HempAmericana, you can compare the effects of market volatilities on GlaxoSmithKline PLC and HempAmericana 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 HempAmericana. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and HempAmericana.
Diversification Opportunities for GlaxoSmithKline PLC and HempAmericana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and HempAmericana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and HempAmericana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HempAmericana 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 HempAmericana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HempAmericana has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and HempAmericana go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and HempAmericana
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.06 times more return on investment than HempAmericana. However, GlaxoSmithKline PLC ADR is 15.86 times less risky than HempAmericana. It trades about -0.3 of its potential returns per unit of risk. HempAmericana is currently generating about -0.21 per unit of risk. If you would invest 3,745 in GlaxoSmithKline PLC ADR on August 29, 2024 and sell it today you would lose (343.00) from holding GlaxoSmithKline PLC ADR or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. HempAmericana
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| HempAmericana |
GlaxoSmithKline PLC and HempAmericana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and HempAmericana
The main advantage of trading using opposite GlaxoSmithKline PLC and HempAmericana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, HempAmericana 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 HempAmericana will offset losses from the drop in HempAmericana'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 |
| HempAmericana vs. Real Brands | HempAmericana vs. Mc Endvrs | HempAmericana vs. One World Pharma | HempAmericana vs. Greater Cannabis |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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