Correlation Between GlaxoSmithKline PLC and MOL Nyrt
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and MOL Nyrt 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 MOL Nyrt 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 MOL Nyrt, you can compare the effects of market volatilities on GlaxoSmithKline PLC and MOL Nyrt 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 MOL Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and MOL Nyrt.
Diversification Opportunities for GlaxoSmithKline PLC and MOL Nyrt
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GlaxoSmithKline and MOL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and MOL Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Nyrt 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 MOL Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Nyrt has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and MOL Nyrt go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and MOL Nyrt
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the MOL Nyrt. In addition to that, GlaxoSmithKline PLC is 1.31 times more volatile than MOL Nyrt. It trades about -0.3 of its total potential returns per unit of risk. MOL Nyrt is currently generating about 0.11 per unit of volatility. If you would invest 262,600 in MOL Nyrt on August 30, 2024 and sell it today you would earn a total of 6,400 from holding MOL Nyrt or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. MOL Nyrt
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| MOL Nyrt |
GlaxoSmithKline PLC and MOL Nyrt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and MOL Nyrt
The main advantage of trading using opposite GlaxoSmithKline PLC and MOL Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, MOL Nyrt 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 MOL Nyrt will offset losses from the drop in MOL Nyrt'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 |
| MOL Nyrt vs. CIG Pannonia Life | MOL Nyrt vs. Infineon Technologies AG | MOL Nyrt vs. AKKO Invest Nyrt | MOL Nyrt vs. AutoWallis Nyrt |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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