Correlation Between GlaxoSmithKline PLC and Jaeren Sparebank
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Jaeren Sparebank 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 Jaeren Sparebank 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 Jaeren Sparebank, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Jaeren Sparebank 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 Jaeren Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Jaeren Sparebank.
Diversification Opportunities for GlaxoSmithKline PLC and Jaeren Sparebank
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Jaeren is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Jaeren Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaeren Sparebank 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 Jaeren Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaeren Sparebank has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Jaeren Sparebank go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Jaeren Sparebank
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 10.26 times less return on investment than Jaeren Sparebank. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 1.11 times less risky than Jaeren Sparebank. It trades about 0.01 of its potential returns per unit of risk. Jaeren Sparebank is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 20,915 in Jaeren Sparebank on August 29, 2024 and sell it today you would earn a total of 10,585 from holding Jaeren Sparebank or generate 50.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Jaeren Sparebank
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Jaeren Sparebank |
GlaxoSmithKline PLC and Jaeren Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Jaeren Sparebank
The main advantage of trading using opposite GlaxoSmithKline PLC and Jaeren Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Jaeren Sparebank 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 Jaeren Sparebank will offset losses from the drop in Jaeren Sparebank'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 |
| Jaeren Sparebank vs. DnB ASA | Jaeren Sparebank vs. Sparebank 1 SR | Jaeren Sparebank vs. Sparebank 1 SMN | Jaeren Sparebank vs. Sparebank 1 Ostfold |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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