Correlation Between GlaxoSmithKline PLC and Intracom Holdings
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Intracom Holdings 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 Intracom Holdings 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 Intracom Holdings SA, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Intracom Holdings 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 Intracom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Intracom Holdings.
Diversification Opportunities for GlaxoSmithKline PLC and Intracom Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GlaxoSmithKline and Intracom is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Intracom Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracom Holdings 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 Intracom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracom Holdings has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Intracom Holdings go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Intracom Holdings
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Intracom Holdings. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.58 times less risky than Intracom Holdings. The stock trades about -0.23 of its potential returns per unit of risk. The Intracom Holdings SA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 276.00 in Intracom Holdings SA on September 1, 2024 and sell it today you would lose (10.00) from holding Intracom Holdings SA or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Intracom Holdings SA
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Intracom Holdings |
GlaxoSmithKline PLC and Intracom Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Intracom Holdings
The main advantage of trading using opposite GlaxoSmithKline PLC and Intracom Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Intracom Holdings 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 Intracom Holdings will offset losses from the drop in Intracom Holdings' 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 |
| Intracom Holdings vs. Intralot SA Integrated | Intracom Holdings vs. Mytilineos SA | Intracom Holdings vs. Public Power | Intracom Holdings vs. Hellenic Telecommunications Organization |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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