Correlation Between GlaxoSmithKline PLC and Locorr Spectrum
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Locorr Spectrum 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 Locorr Spectrum 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 Locorr Spectrum Income, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Locorr Spectrum 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 Locorr Spectrum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Locorr Spectrum.
Diversification Opportunities for GlaxoSmithKline PLC and Locorr Spectrum
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between GlaxoSmithKline and Locorr is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Locorr Spectrum Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Spectrum 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 Locorr Spectrum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Spectrum Income has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Locorr Spectrum go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Locorr Spectrum
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Locorr Spectrum. In addition to that, GlaxoSmithKline PLC is 2.75 times more volatile than Locorr Spectrum Income. It trades about -0.05 of its total potential returns per unit of risk. Locorr Spectrum Income is currently generating about 0.07 per unit of volatility. If you would invest 513.00 in Locorr Spectrum Income on September 18, 2024 and sell it today you would earn a total of 32.00 from holding Locorr Spectrum Income or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Locorr Spectrum Income
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Locorr Spectrum Income |
GlaxoSmithKline PLC and Locorr Spectrum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Locorr Spectrum
The main advantage of trading using opposite GlaxoSmithKline PLC and Locorr Spectrum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Locorr Spectrum 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 Locorr Spectrum will offset losses from the drop in Locorr Spectrum'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 |
| Locorr Spectrum vs. Locorr Market Trend | Locorr Spectrum vs. Locorr Market Trend | Locorr Spectrum vs. Locorr Spectrum Income | Locorr Spectrum vs. Locorr Longshort Modities |
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
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |