Correlation Between GlaxoSmithKline PLC and Alphacentric Hedged
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Alphacentric Hedged 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 Alphacentric Hedged 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 Alphacentric Hedged Market, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Alphacentric Hedged 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 Alphacentric Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Alphacentric Hedged.
Diversification Opportunities for GlaxoSmithKline PLC and Alphacentric Hedged
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Alphacentric is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Alphacentric Hedged Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Hedged 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 Alphacentric Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Hedged has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Alphacentric Hedged go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Alphacentric Hedged
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Alphacentric Hedged. In addition to that, GlaxoSmithKline PLC is 2.12 times more volatile than Alphacentric Hedged Market. It trades about -0.12 of its total potential returns per unit of risk. Alphacentric Hedged Market is currently generating about 0.05 per unit of volatility. If you would invest 2,607 in Alphacentric Hedged Market on August 26, 2024 and sell it today you would earn a total of 108.00 from holding Alphacentric Hedged Market or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Alphacentric Hedged Market
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Alphacentric Hedged |
GlaxoSmithKline PLC and Alphacentric Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Alphacentric Hedged
The main advantage of trading using opposite GlaxoSmithKline PLC and Alphacentric Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Alphacentric Hedged 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 Alphacentric Hedged will offset losses from the drop in Alphacentric Hedged'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 |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |