Correlation Between GlaxoSmithKline PLC and KraneShares
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and KraneShares 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 KraneShares 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 KraneShares, you can compare the effects of market volatilities on GlaxoSmithKline PLC and KraneShares 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 KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and KraneShares.
Diversification Opportunities for GlaxoSmithKline PLC and KraneShares
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and KraneShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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 KraneShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and KraneShares go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and KraneShares
If you would invest 2,091 in KraneShares on September 1, 2024 and sell it today you would earn a total of 0.00 from holding KraneShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. KraneShares
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and KraneShares
The main advantage of trading using opposite GlaxoSmithKline PLC and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, KraneShares 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 KraneShares will offset losses from the drop in KraneShares' 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 |
| KraneShares vs. KraneShares Emerging Markets | KraneShares vs. KraneShares MSCI All | KraneShares vs. KraneShares MSCI All |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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