Correlation Between GlaxoSmithKline PLC and Mapfre SA
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Mapfre SA 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 Mapfre SA 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 Mapfre SA, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Mapfre SA 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 Mapfre SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Mapfre SA.
Diversification Opportunities for GlaxoSmithKline PLC and Mapfre SA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Mapfre is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Mapfre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre SA 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 Mapfre SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre SA has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Mapfre SA go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Mapfre SA
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Mapfre SA. In addition to that, GlaxoSmithKline PLC is 7.54 times more volatile than Mapfre SA. It trades about -0.3 of its total potential returns per unit of risk. Mapfre SA is currently generating about -0.22 per unit of volatility. If you would invest 234.00 in Mapfre SA on August 28, 2024 and sell it today you would lose (2.00) from holding Mapfre SA or give up 0.85% 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. Mapfre SA
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Mapfre SA |
GlaxoSmithKline PLC and Mapfre SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Mapfre SA
The main advantage of trading using opposite GlaxoSmithKline PLC and Mapfre SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Mapfre SA 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 Mapfre SA will offset losses from the drop in Mapfre SA'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 |
| Mapfre SA vs. Fundamental Global | Mapfre SA vs. Waterdrop ADR | Mapfre SA vs. Goosehead Insurance | Mapfre SA vs. Old Republic International |
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
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |