Correlation Between GlaxoSmithKline PLC and Meitav Trade
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Meitav Trade 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 Meitav Trade 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 Meitav Trade Inv, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Meitav Trade 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 Meitav Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Meitav Trade.
Diversification Opportunities for GlaxoSmithKline PLC and Meitav Trade
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Meitav is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Meitav Trade Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Trade Inv 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 Meitav Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Trade Inv has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Meitav Trade go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Meitav Trade
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Meitav Trade. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.12 times less risky than Meitav Trade. The stock trades about -0.23 of its potential returns per unit of risk. The Meitav Trade Inv is currently generating about 0.69 of returns per unit of risk over similar time horizon. If you would invest 961.00 in Meitav Trade Inv on September 1, 2024 and sell it today you would earn a total of 184.00 from holding Meitav Trade Inv or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Meitav Trade Inv
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Meitav Trade Inv |
GlaxoSmithKline PLC and Meitav Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Meitav Trade
The main advantage of trading using opposite GlaxoSmithKline PLC and Meitav Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Meitav Trade 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 Meitav Trade will offset losses from the drop in Meitav Trade'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 |
| Meitav Trade vs. Nice | Meitav Trade vs. The Gold Bond | Meitav Trade vs. Bank Leumi Le Israel | Meitav Trade vs. ICL Israel Chemicals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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