Correlation Between GlaxoSmithKline PLC and Lazard Global
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Lazard Global 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 Lazard Global 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 Lazard Global Total, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Lazard Global 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 Lazard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Lazard Global.
Diversification Opportunities for GlaxoSmithKline PLC and Lazard Global
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GlaxoSmithKline and Lazard is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Lazard Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Global Total 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 Lazard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Global Total has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Lazard Global go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Lazard Global
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Lazard Global. In addition to that, GlaxoSmithKline PLC is 1.39 times more volatile than Lazard Global Total. It trades about 0.0 of its total potential returns per unit of risk. Lazard Global Total is currently generating about 0.1 per unit of volatility. If you would invest 1,342 in Lazard Global Total on August 27, 2024 and sell it today you would earn a total of 343.00 from holding Lazard Global Total or generate 25.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Lazard Global Total
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Lazard Global Total |
GlaxoSmithKline PLC and Lazard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Lazard Global
The main advantage of trading using opposite GlaxoSmithKline PLC and Lazard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Lazard Global 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 Lazard Global will offset losses from the drop in Lazard Global'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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