Correlation Between GlaxoSmithKline PLC and Kartonsan Karton
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Kartonsan Karton 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 Kartonsan Karton 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 Kartonsan Karton Sanayi, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Kartonsan Karton 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 Kartonsan Karton. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Kartonsan Karton.
Diversification Opportunities for GlaxoSmithKline PLC and Kartonsan Karton
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Kartonsan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Kartonsan Karton Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kartonsan Karton Sanayi 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 Kartonsan Karton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kartonsan Karton Sanayi has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Kartonsan Karton go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Kartonsan Karton
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Kartonsan Karton. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.9 times less risky than Kartonsan Karton. The stock trades about -0.23 of its potential returns per unit of risk. The Kartonsan Karton Sanayi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,605 in Kartonsan Karton Sanayi on September 1, 2024 and sell it today you would lose (15.00) from holding Kartonsan Karton Sanayi or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Kartonsan Karton Sanayi
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Kartonsan Karton Sanayi |
GlaxoSmithKline PLC and Kartonsan Karton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Kartonsan Karton
The main advantage of trading using opposite GlaxoSmithKline PLC and Kartonsan Karton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Kartonsan Karton 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 Kartonsan Karton will offset losses from the drop in Kartonsan Karton'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 |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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