Correlation Between GlaxoSmithKline PLC and Ladenburg Growth
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Ladenburg Growth 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 Ladenburg Growth 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 Ladenburg Growth Income, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Ladenburg Growth 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 Ladenburg Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Ladenburg Growth.
Diversification Opportunities for GlaxoSmithKline PLC and Ladenburg Growth
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Ladenburg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Ladenburg Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth Income 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 Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth Income has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Ladenburg Growth go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Ladenburg Growth
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Ladenburg Growth. In addition to that, GlaxoSmithKline PLC is 2.18 times more volatile than Ladenburg Growth Income. It trades about -0.23 of its total potential returns per unit of risk. Ladenburg Growth Income is currently generating about 0.25 per unit of volatility. If you would invest 1,468 in Ladenburg Growth Income on August 31, 2024 and sell it today you would earn a total of 47.00 from holding Ladenburg Growth Income or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Ladenburg Growth Income
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Ladenburg Growth Income |
GlaxoSmithKline PLC and Ladenburg Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Ladenburg Growth
The main advantage of trading using opposite GlaxoSmithKline PLC and Ladenburg Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Ladenburg Growth 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 Ladenburg Growth will offset losses from the drop in Ladenburg Growth'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 |
| Ladenburg Growth vs. Dws Government Money | Ladenburg Growth vs. John Hancock Government | Ladenburg Growth vs. Dunham Porategovernment Bond | Ladenburg Growth vs. Virtus Seix Government |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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