Correlation Between GlaxoSmithKline PLC and MyHealthChecked Plc
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and MyHealthChecked Plc 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 MyHealthChecked Plc 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 MyHealthChecked Plc, you can compare the effects of market volatilities on GlaxoSmithKline PLC and MyHealthChecked Plc 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 MyHealthChecked Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and MyHealthChecked Plc.
Diversification Opportunities for GlaxoSmithKline PLC and MyHealthChecked Plc
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and MyHealthChecked is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and MyHealthChecked Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyHealthChecked Plc 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 MyHealthChecked Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyHealthChecked Plc has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and MyHealthChecked Plc go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and MyHealthChecked Plc
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the MyHealthChecked Plc. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.13 times less risky than MyHealthChecked Plc. The stock trades about -0.23 of its potential returns per unit of risk. The MyHealthChecked Plc is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,275 in MyHealthChecked Plc on September 1, 2024 and sell it today you would lose (75.00) from holding MyHealthChecked Plc or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. MyHealthChecked Plc
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| MyHealthChecked Plc |
GlaxoSmithKline PLC and MyHealthChecked Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and MyHealthChecked Plc
The main advantage of trading using opposite GlaxoSmithKline PLC and MyHealthChecked Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, MyHealthChecked Plc 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 MyHealthChecked Plc will offset losses from the drop in MyHealthChecked Plc'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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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