Correlation Between GlaxoSmithKline PLC and Voya Multi-manager
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Voya Multi-manager 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 Voya Multi-manager 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 Voya Multi Manager International, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Voya Multi-manager 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 Voya Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Voya Multi-manager.
Diversification Opportunities for GlaxoSmithKline PLC and Voya Multi-manager
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Voya is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Voya Multi Manager Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager 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 Voya Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Voya Multi-manager go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Voya Multi-manager
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Voya Multi-manager. In addition to that, GlaxoSmithKline PLC is 1.51 times more volatile than Voya Multi Manager International. It trades about -0.08 of its total potential returns per unit of risk. Voya Multi Manager International is currently generating about 0.0 per unit of volatility. If you would invest 5,456 in Voya Multi Manager International on August 30, 2024 and sell it today you would lose (30.00) from holding Voya Multi Manager International or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Voya Multi Manager Internation
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Voya Multi Manager |
GlaxoSmithKline PLC and Voya Multi-manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Voya Multi-manager
The main advantage of trading using opposite GlaxoSmithKline PLC and Voya Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Voya Multi-manager 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 Voya Multi-manager will offset losses from the drop in Voya Multi-manager'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 |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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