Correlation Between GlaxoSmithKline PLC and Jaws Mustang
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Jaws Mustang 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 Jaws Mustang 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 Jaws Mustang Acquisition, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Jaws Mustang 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 Jaws Mustang. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Jaws Mustang.
Diversification Opportunities for GlaxoSmithKline PLC and Jaws Mustang
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Jaws is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Jaws Mustang Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaws Mustang Acquisition 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 Jaws Mustang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaws Mustang Acquisition has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Jaws Mustang go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Jaws Mustang
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Jaws Mustang. In addition to that, GlaxoSmithKline PLC is 5.68 times more volatile than Jaws Mustang Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Jaws Mustang Acquisition is currently generating about 0.08 per unit of volatility. If you would invest 1,081 in Jaws Mustang Acquisition on August 26, 2024 and sell it today you would earn a total of 49.00 from holding Jaws Mustang Acquisition or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.39% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Jaws Mustang Acquisition
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Jaws Mustang Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
GlaxoSmithKline PLC and Jaws Mustang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Jaws Mustang
The main advantage of trading using opposite GlaxoSmithKline PLC and Jaws Mustang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Jaws Mustang 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 Jaws Mustang will offset losses from the drop in Jaws Mustang'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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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