Correlation Between GlaxoSmithKline PLC and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Massmutual Select 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 Massmutual Select 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 Massmutual Select Blue, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Massmutual Select.
Diversification Opportunities for GlaxoSmithKline PLC and Massmutual Select
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Massmutual is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Massmutual Select Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Blue 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Blue has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Massmutual Select go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Massmutual Select
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 1.49 times more return on investment than Massmutual Select. However, GlaxoSmithKline PLC is 1.49 times more volatile than Massmutual Select Blue. It trades about 0.08 of its potential returns per unit of risk. Massmutual Select Blue is currently generating about 0.07 per unit of risk. If you would invest 3,369 in GlaxoSmithKline PLC ADR on November 18, 2024 and sell it today you would earn a total of 248.00 from holding GlaxoSmithKline PLC ADR or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Massmutual Select Blue
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Massmutual Select Blue |
GlaxoSmithKline PLC and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Massmutual Select
The main advantage of trading using opposite GlaxoSmithKline PLC and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select'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 |
| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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