Correlation Between GlaxoSmithKline PLC and KORIAN
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and KORIAN 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 KORIAN 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 KORIAN, you can compare the effects of market volatilities on GlaxoSmithKline PLC and KORIAN 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 KORIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and KORIAN.
Diversification Opportunities for GlaxoSmithKline PLC and KORIAN
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and KORIAN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and KORIAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORIAN 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 KORIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORIAN has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and KORIAN go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and KORIAN
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the KORIAN. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 68.04 times less risky than KORIAN. The stock trades about -0.33 of its potential returns per unit of risk. The KORIAN is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 210.00 in KORIAN on August 27, 2024 and sell it today you would earn a total of 712.00 from holding KORIAN or generate 339.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. KORIAN
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| KORIAN |
GlaxoSmithKline PLC and KORIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and KORIAN
The main advantage of trading using opposite GlaxoSmithKline PLC and KORIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, KORIAN 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 KORIAN will offset losses from the drop in KORIAN'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 |
| KORIAN vs. NORWEGIAN AIR SHUT | KORIAN vs. International Game Technology | KORIAN vs. GigaMedia | KORIAN vs. OURGAME INTHOLDL 00005 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |