Correlation Between GlaxoSmithKline PLC and Massmutual Retiresmart
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Massmutual Retiresmart 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 Massmutual Retiresmart 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 Massmutual Retiresmart Servative, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Massmutual Retiresmart 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 Massmutual Retiresmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Massmutual Retiresmart.
Diversification Opportunities for GlaxoSmithKline PLC and Massmutual Retiresmart
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Massmutual is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Massmutual Retiresmart Servati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Retiresmart 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 Massmutual Retiresmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Retiresmart has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Massmutual Retiresmart go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Massmutual Retiresmart
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Massmutual Retiresmart. In addition to that, GlaxoSmithKline PLC is 4.8 times more volatile than Massmutual Retiresmart Servative. It trades about -0.12 of its total potential returns per unit of risk. Massmutual Retiresmart Servative is currently generating about 0.11 per unit of volatility. If you would invest 864.00 in Massmutual Retiresmart Servative on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Massmutual Retiresmart Servative or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Massmutual Retiresmart Servati
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Massmutual Retiresmart |
GlaxoSmithKline PLC and Massmutual Retiresmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Massmutual Retiresmart
The main advantage of trading using opposite GlaxoSmithKline PLC and Massmutual Retiresmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Massmutual Retiresmart 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 Massmutual Retiresmart will offset losses from the drop in Massmutual Retiresmart'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world |