Correlation Between GlaxoSmithKline PLC and Nanophase Technol
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Nanophase Technol 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 Nanophase Technol 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 Nanophase Technol, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Nanophase Technol 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 Nanophase Technol. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Nanophase Technol.
Diversification Opportunities for GlaxoSmithKline PLC and Nanophase Technol
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Nanophase is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol 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 Nanophase Technol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanophase Technol has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Nanophase Technol go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Nanophase Technol
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 31.69 times less return on investment than Nanophase Technol. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 6.63 times less risky than Nanophase Technol. It trades about 0.01 of its potential returns per unit of risk. Nanophase Technol is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Nanophase Technol on August 30, 2024 and sell it today you would earn a total of 28.00 from holding Nanophase Technol or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.31% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Nanophase Technol
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Nanophase Technol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Nanophase Technol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Nanophase Technol
The main advantage of trading using opposite GlaxoSmithKline PLC and Nanophase Technol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Nanophase Technol 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 Nanophase Technol will offset losses from the drop in Nanophase Technol'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 |
| Nanophase Technol vs. Iofina plc | Nanophase Technol vs. Green Star Products | Nanophase Technol vs. Greystone Logistics | Nanophase Technol vs. Crown Electrokinetics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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