Correlation Between GlaxoSmithKline PLC and New Age
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and New Age 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 New Age 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 New Age Metals, you can compare the effects of market volatilities on GlaxoSmithKline PLC and New Age 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 New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and New Age.
Diversification Opportunities for GlaxoSmithKline PLC and New Age
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and New is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals 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 New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and New Age go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and New Age
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 17.19 times less return on investment than New Age. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 7.61 times less risky than New Age. It trades about 0.01 of its potential returns per unit of risk. New Age Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 28.00 in New Age Metals on August 26, 2024 and sell it today you would lose (18.50) from holding New Age Metals or give up 66.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. New Age Metals
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| New Age Metals |
GlaxoSmithKline PLC and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and New Age
The main advantage of trading using opposite GlaxoSmithKline PLC and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age'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 |
| New Age vs. First Majestic Silver | New Age vs. Ivanhoe Energy | New Age vs. Orezone Gold Corp | New Age vs. Faraday Copper Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |