Correlation Between GlaxoSmithKline PLC and Nutrien
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Nutrien 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 Nutrien 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 Nutrien, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Nutrien 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 Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Nutrien.
Diversification Opportunities for GlaxoSmithKline PLC and Nutrien
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and Nutrien is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Nutrien go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Nutrien
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Nutrien. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.28 times less risky than Nutrien. The stock trades about -0.23 of its potential returns per unit of risk. The Nutrien is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 6,639 in Nutrien on September 1, 2024 and sell it today you would lose (99.00) from holding Nutrien or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Nutrien
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Nutrien |
GlaxoSmithKline PLC and Nutrien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Nutrien
The main advantage of trading using opposite GlaxoSmithKline PLC and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien'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 |
| Nutrien vs. CVW CleanTech | Nutrien vs. Chemtrade Logistics Income | Nutrien vs. Bip Investment Corp | Nutrien vs. 2028 Investment Grade |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |