Correlation Between GlaxoSmithKline PLC and VanEck Emerging
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and VanEck Emerging 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 VanEck Emerging 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 VanEck Emerging Markets, you can compare the effects of market volatilities on GlaxoSmithKline PLC and VanEck Emerging 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 VanEck Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and VanEck Emerging.
Diversification Opportunities for GlaxoSmithKline PLC and VanEck Emerging
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and VanEck is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and VanEck Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Emerging Markets 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 VanEck Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Emerging Markets has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and VanEck Emerging go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and VanEck Emerging
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the VanEck Emerging. In addition to that, GlaxoSmithKline PLC is 3.09 times more volatile than VanEck Emerging Markets. It trades about -0.31 of its total potential returns per unit of risk. VanEck Emerging Markets is currently generating about 0.06 per unit of volatility. If you would invest 1,953 in VanEck Emerging Markets on August 29, 2024 and sell it today you would earn a total of 11.00 from holding VanEck Emerging Markets or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. VanEck Emerging Markets
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| VanEck Emerging Markets |
GlaxoSmithKline PLC and VanEck Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and VanEck Emerging
The main advantage of trading using opposite GlaxoSmithKline PLC and VanEck Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, VanEck Emerging 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 VanEck Emerging will offset losses from the drop in VanEck Emerging'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 |
| VanEck Emerging vs. BondBloxx ETF Trust | VanEck Emerging vs. Virtus ETF Trust | VanEck Emerging vs. Ocean Park High | VanEck Emerging vs. Virtus ETF Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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