Correlation Between GlaxoSmithKline PLC and Link Mobility
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Link Mobility 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 Link Mobility 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 Link Mobility Group, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Link Mobility 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 Link Mobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Link Mobility.
Diversification Opportunities for GlaxoSmithKline PLC and Link Mobility
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Link is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Link Mobility Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Mobility Group 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 Link Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Mobility Group has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Link Mobility go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Link Mobility
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Link Mobility. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.6 times less risky than Link Mobility. The stock trades about -0.08 of its potential returns per unit of risk. The Link Mobility Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,085 in Link Mobility Group on August 30, 2024 and sell it today you would earn a total of 255.00 from holding Link Mobility Group or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Link Mobility Group
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Link Mobility Group |
GlaxoSmithKline PLC and Link Mobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Link Mobility
The main advantage of trading using opposite GlaxoSmithKline PLC and Link Mobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Link Mobility 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 Link Mobility will offset losses from the drop in Link Mobility'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 |
| Link Mobility vs. Crayon Group Holding | Link Mobility vs. NRC Group ASA | Link Mobility vs. Pexip Holding ASA | Link Mobility vs. Europris ASA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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