Correlation Between GlaxoSmithKline PLC and KB HOME

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and KB HOME 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 KB HOME 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 KB HOME, you can compare the effects of market volatilities on GlaxoSmithKline PLC and KB HOME 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 KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and KB HOME.

Diversification Opportunities for GlaxoSmithKline PLC and KB HOME

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between GlaxoSmithKline and KBH is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME 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 KB HOME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB HOME has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and KB HOME go up and down completely randomly.

Pair Corralation between GlaxoSmithKline PLC and KB HOME

Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 13.59 times less return on investment than KB HOME. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 1.67 times less risky than KB HOME. It trades about 0.01 of its potential returns per unit of risk. KB HOME is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,876  in KB HOME on August 25, 2024 and sell it today you would earn a total of  4,674  from holding KB HOME or generate 162.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.22%
ValuesDaily Returns

GlaxoSmithKline PLC ADR  vs.  KB HOME

 Performance 
       Timeline  
GlaxoSmithKline PLC ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GlaxoSmithKline PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
KB HOME 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in KB HOME are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, KB HOME is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GlaxoSmithKline PLC and KB HOME Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GlaxoSmithKline PLC and KB HOME

The main advantage of trading using opposite GlaxoSmithKline PLC and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, KB HOME 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 KB HOME will offset losses from the drop in KB HOME'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
The idea behind GlaxoSmithKline PLC ADR and KB HOME pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
KB HOME vs. Sporttotal AG
KB HOME vs. AAC TECHNOLOGHLDGADR
KB HOME vs. SPORT LISBOA E
KB HOME vs. GLG LIFE TECH
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY