Correlation Between GlaxoSmithKline PLC and La Savonnerie
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and La Savonnerie 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 La Savonnerie 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 La Savonnerie de, you can compare the effects of market volatilities on GlaxoSmithKline PLC and La Savonnerie 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 La Savonnerie. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and La Savonnerie.
Diversification Opportunities for GlaxoSmithKline PLC and La Savonnerie
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and MLSDN is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and La Savonnerie de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Savonnerie de 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 La Savonnerie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Savonnerie de has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and La Savonnerie go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and La Savonnerie
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 7.23 times less return on investment than La Savonnerie. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 3.24 times less risky than La Savonnerie. It trades about 0.01 of its potential returns per unit of risk. La Savonnerie de is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,077 in La Savonnerie de on August 29, 2024 and sell it today you would lose (97.00) from holding La Savonnerie de or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.17% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. La Savonnerie de
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| La Savonnerie de |
GlaxoSmithKline PLC and La Savonnerie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and La Savonnerie
The main advantage of trading using opposite GlaxoSmithKline PLC and La Savonnerie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, La Savonnerie 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 La Savonnerie will offset losses from the drop in La Savonnerie'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 |
| La Savonnerie vs. Poulaillon SA | La Savonnerie vs. Poujoulat SA | La Savonnerie vs. Trilogiq | La Savonnerie vs. Sergeferrari G |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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