Correlation Between GlaxoSmithKline PLC and Coliseum Acquisition
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Coliseum Acquisition 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 Coliseum Acquisition 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 Coliseum Acquisition Corp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Coliseum Acquisition 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 Coliseum Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Coliseum Acquisition.
Diversification Opportunities for GlaxoSmithKline PLC and Coliseum Acquisition
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Coliseum is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Coliseum Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coliseum Acquisition Corp 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 Coliseum Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coliseum Acquisition Corp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Coliseum Acquisition go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Coliseum Acquisition
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Coliseum Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 26.89 times less risky than Coliseum Acquisition. The stock trades about -0.23 of its potential returns per unit of risk. The Coliseum Acquisition Corp is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Coliseum Acquisition Corp on September 1, 2024 and sell it today you would earn a total of 6.80 from holding Coliseum Acquisition Corp or generate 161.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.33% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Coliseum Acquisition Corp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Coliseum Acquisition Corp |
GlaxoSmithKline PLC and Coliseum Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Coliseum Acquisition
The main advantage of trading using opposite GlaxoSmithKline PLC and Coliseum Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Coliseum Acquisition 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 Coliseum Acquisition will offset losses from the drop in Coliseum Acquisition'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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |