Correlation Between GlaxoSmithKline PLC and Haier Smart
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Haier Smart.
Diversification Opportunities for GlaxoSmithKline PLC and Haier Smart
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Haier is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Haier Smart go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Haier Smart
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.14 times more return on investment than Haier Smart. However, GlaxoSmithKline PLC ADR is 7.08 times less risky than Haier Smart. It trades about -0.23 of its potential returns per unit of risk. Haier Smart Home is currently generating about -0.09 per unit of risk. If you would invest 3,659 in GlaxoSmithKline PLC ADR on August 31, 2024 and sell it today you would lose (226.00) from holding GlaxoSmithKline PLC ADR or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Haier Smart Home
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Haier Smart Home |
GlaxoSmithKline PLC and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Haier Smart
The main advantage of trading using opposite GlaxoSmithKline PLC and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart'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 |
| Haier Smart vs. La Z Boy Incorporated | Haier Smart vs. MasterBrand | Haier Smart vs. MillerKnoll | Haier Smart vs. Flexsteel Industries |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |