Correlation Between GlaxoSmithKline PLC and Levinstein Prop
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Levinstein Prop 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 Levinstein Prop 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 Levinstein Prop, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Levinstein Prop 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 Levinstein Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Levinstein Prop.
Diversification Opportunities for GlaxoSmithKline PLC and Levinstein Prop
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Levinstein is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Levinstein Prop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levinstein Prop 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 Levinstein Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levinstein Prop has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Levinstein Prop go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Levinstein Prop
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 1.46 times less return on investment than Levinstein Prop. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 2.18 times less risky than Levinstein Prop. It trades about 0.01 of its potential returns per unit of risk. Levinstein Prop is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 801,628 in Levinstein Prop on August 29, 2024 and sell it today you would lose (71,628) from holding Levinstein Prop or give up 8.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.78% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Levinstein Prop
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Levinstein Prop |
GlaxoSmithKline PLC and Levinstein Prop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Levinstein Prop
The main advantage of trading using opposite GlaxoSmithKline PLC and Levinstein Prop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Levinstein Prop 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 Levinstein Prop will offset losses from the drop in Levinstein Prop'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 |
| Levinstein Prop vs. Israel Canada | Levinstein Prop vs. Delek Group | Levinstein Prop vs. Shikun Binui | Levinstein Prop vs. Israel Discount Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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