Correlation Between GlaxoSmithKline PLC and Next Mediaworks
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By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Next Mediaworks Limited, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Next Mediaworks 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 Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Next Mediaworks.
Diversification Opportunities for GlaxoSmithKline PLC and Next Mediaworks
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Next is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks 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 Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Next Mediaworks go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Next Mediaworks
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Next Mediaworks. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.74 times less risky than Next Mediaworks. The stock trades about -0.12 of its potential returns per unit of risk. The Next Mediaworks Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Next Mediaworks Limited on August 29, 2024 and sell it today you would earn a total of 356.00 from holding Next Mediaworks Limited or generate 51.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Next Mediaworks Limited
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Next Mediaworks |
GlaxoSmithKline PLC and Next Mediaworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Next Mediaworks
The main advantage of trading using opposite GlaxoSmithKline PLC and Next Mediaworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Next Mediaworks 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 Next Mediaworks will offset losses from the drop in Next Mediaworks' 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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