Correlation Between GlaxoSmithKline PLC and Immunitybio
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Immunitybio 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 Immunitybio 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 Immunitybio, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Immunitybio 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 Immunitybio. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Immunitybio.
Diversification Opportunities for GlaxoSmithKline PLC and Immunitybio
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Immunitybio is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Immunitybio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunitybio 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 Immunitybio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunitybio has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Immunitybio go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Immunitybio
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 19.36 times less return on investment than Immunitybio. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 5.39 times less risky than Immunitybio. It trades about 0.02 of its potential returns per unit of risk. Immunitybio is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 296.00 in Immunitybio on August 31, 2024 and sell it today you would earn a total of 208.00 from holding Immunitybio or generate 70.27% 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. Immunitybio
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Immunitybio |
GlaxoSmithKline PLC and Immunitybio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Immunitybio
The main advantage of trading using opposite GlaxoSmithKline PLC and Immunitybio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Immunitybio 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 Immunitybio will offset losses from the drop in Immunitybio'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 |
| Immunitybio vs. BioLineRx | Immunitybio vs. Ardelyx | Immunitybio vs. Lexicon Pharmaceuticals | Immunitybio vs. Seres Therapeutics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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