Correlation Between GlaxoSmithKline PLC and Lobe Sciences
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Lobe Sciences 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 Lobe Sciences 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 Lobe Sciences, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Lobe Sciences 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 Lobe Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Lobe Sciences.
Diversification Opportunities for GlaxoSmithKline PLC and Lobe Sciences
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Lobe is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Lobe Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lobe Sciences 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 Lobe Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lobe Sciences has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Lobe Sciences go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Lobe Sciences
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 10960.29 times less return on investment than Lobe Sciences. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 162.76 times less risky than Lobe Sciences. It trades about 0.0 of its potential returns per unit of risk. Lobe Sciences is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2.63 in Lobe Sciences on August 26, 2024 and sell it today you would lose (1.38) from holding Lobe Sciences or give up 52.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Lobe Sciences
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Lobe Sciences |
GlaxoSmithKline PLC and Lobe Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Lobe Sciences
The main advantage of trading using opposite GlaxoSmithKline PLC and Lobe Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Lobe Sciences 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 Lobe Sciences will offset losses from the drop in Lobe Sciences' 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 |
| Lobe Sciences vs. Green Cures Botanical | Lobe Sciences vs. Galexxy Holdings | Lobe Sciences vs. Indoor Harvest Corp | Lobe Sciences vs. Speakeasy Cannabis Club |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |