Correlation Between GlaxoSmithKline PLC and Kinea Securities
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Kinea Securities 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 Kinea Securities 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 Kinea Securities Fundo, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Kinea Securities 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 Kinea Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Kinea Securities.
Diversification Opportunities for GlaxoSmithKline PLC and Kinea Securities
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GlaxoSmithKline and Kinea is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Kinea Securities Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Securities Fundo 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 Kinea Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Securities Fundo has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Kinea Securities go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Kinea Securities
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Kinea Securities. In addition to that, GlaxoSmithKline PLC is 1.66 times more volatile than Kinea Securities Fundo. It trades about -0.3 of its total potential returns per unit of risk. Kinea Securities Fundo is currently generating about -0.23 per unit of volatility. If you would invest 878.00 in Kinea Securities Fundo on August 30, 2024 and sell it today you would lose (34.00) from holding Kinea Securities Fundo or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Kinea Securities Fundo
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Kinea Securities Fundo |
GlaxoSmithKline PLC and Kinea Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Kinea Securities
The main advantage of trading using opposite GlaxoSmithKline PLC and Kinea Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Kinea Securities 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 Kinea Securities will offset losses from the drop in Kinea Securities' 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 |
| Kinea Securities vs. Kinea Oportunidades Real | Kinea Securities vs. Kinea Indices Precos | Kinea Securities vs. Kinea Creditas Fundo | Kinea Securities vs. Kinea Renda Imobiliria |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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