Correlation Between GlaxoSmithKline PLC and Mason Graphite
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mason Graphite 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 Mason Graphite 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 Mason Graphite, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mason Graphite 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 Mason Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mason Graphite.
Diversification Opportunities for GlaxoSmithKline PLC and Mason Graphite
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GlaxoSmithKline and Mason is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mason Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mason Graphite 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 Mason Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mason Graphite has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mason Graphite go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mason Graphite
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.32 times more return on investment than Mason Graphite. However, GlaxoSmithKline PLC ADR is 3.09 times less risky than Mason Graphite. It trades about -0.33 of its potential returns per unit of risk. Mason Graphite is currently generating about -0.2 per unit of risk. If you would invest 3,745 in GlaxoSmithKline PLC ADR on August 27, 2024 and sell it today you would lose (349.00) from holding GlaxoSmithKline PLC ADR or give up 9.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Mason Graphite
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mason Graphite |
GlaxoSmithKline PLC and Mason Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mason Graphite
The main advantage of trading using opposite GlaxoSmithKline PLC and Mason Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mason Graphite 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 Mason Graphite will offset losses from the drop in Mason Graphite'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 |
| Mason Graphite vs. Ascendant Resources | Mason Graphite vs. Cantex Mine Development | Mason Graphite vs. Amarc Resources | Mason Graphite vs. Sterling Metals Corp |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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