Correlation Between GlaxoSmithKline PLC and IAC
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and IAC 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 IAC 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 IAC Inc, you can compare the effects of market volatilities on GlaxoSmithKline PLC and IAC 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 IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and IAC.
Diversification Opportunities for GlaxoSmithKline PLC and IAC
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and IAC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC Inc 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 IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and IAC go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and IAC
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.57 times more return on investment than IAC. However, GlaxoSmithKline PLC ADR is 1.75 times less risky than IAC. It trades about 0.01 of its potential returns per unit of risk. IAC Inc is currently generating about 0.0 per unit of risk. If you would invest 3,403 in GlaxoSmithKline PLC ADR on August 31, 2024 and sell it today you would earn a total of 30.00 from holding GlaxoSmithKline PLC ADR or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. IAC Inc
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| IAC Inc |
GlaxoSmithKline PLC and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and IAC
The main advantage of trading using opposite GlaxoSmithKline PLC and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, IAC 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 IAC will offset losses from the drop in IAC'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
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |