Correlation Between GlaxoSmithKline PLC and China Finance
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and China Finance 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 China Finance 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 China Finance Online, you can compare the effects of market volatilities on GlaxoSmithKline PLC and China Finance 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 China Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and China Finance.
Diversification Opportunities for GlaxoSmithKline PLC and China Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and China Finance Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Finance Online 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 China Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Finance Online has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and China Finance go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and China Finance
If you would invest 0.01 in China Finance Online on August 30, 2024 and sell it today you would earn a total of 0.00 from holding China Finance Online or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. China Finance Online
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| China Finance Online |
GlaxoSmithKline PLC and China Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and China Finance
The main advantage of trading using opposite GlaxoSmithKline PLC and China Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, China Finance 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 China Finance will offset losses from the drop in China Finance'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 |
| China Finance vs. SPENN Technology AS | China Finance vs. OFX Group Ltd | China Finance vs. Cypherpunk Holdings | China Finance vs. Cathedra Bitcoin |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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