Correlation Between GlaxoSmithKline PLC and Mantex AB
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mantex AB 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 Mantex AB 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 Mantex AB, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mantex AB 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 Mantex AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mantex AB.
Diversification Opportunities for GlaxoSmithKline PLC and Mantex AB
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlaxoSmithKline and Mantex is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mantex AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mantex AB 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 Mantex AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mantex AB has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mantex AB go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mantex AB
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.23 times more return on investment than Mantex AB. However, GlaxoSmithKline PLC ADR is 4.29 times less risky than Mantex AB. It trades about -0.23 of its potential returns per unit of risk. Mantex AB is currently generating about -0.28 per unit of risk. If you would invest 3,659 in GlaxoSmithKline PLC ADR on August 31, 2024 and sell it today you would lose (226.00) from holding GlaxoSmithKline PLC ADR or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Mantex AB
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mantex AB |
GlaxoSmithKline PLC and Mantex AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mantex AB
The main advantage of trading using opposite GlaxoSmithKline PLC and Mantex AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mantex AB 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 Mantex AB will offset losses from the drop in Mantex AB'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |