Correlation Between GlaxoSmithKline PLC and OCBC
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and OCBC 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 OCBC 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 OCBC, you can compare the effects of market volatilities on GlaxoSmithKline PLC and OCBC 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 OCBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and OCBC.
Diversification Opportunities for GlaxoSmithKline PLC and OCBC
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and OCBC is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and OCBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCBC 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 OCBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCBC has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and OCBC go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and OCBC
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the OCBC. In addition to that, GlaxoSmithKline PLC is 1.02 times more volatile than OCBC. It trades about -0.3 of its total potential returns per unit of risk. OCBC is currently generating about 0.29 per unit of volatility. If you would invest 1,061 in OCBC on August 30, 2024 and sell it today you would earn a total of 96.00 from holding OCBC or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. OCBC
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| OCBC |
GlaxoSmithKline PLC and OCBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and OCBC
The main advantage of trading using opposite GlaxoSmithKline PLC and OCBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, OCBC 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 OCBC will offset losses from the drop in OCBC'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 |
| OCBC vs. EPSILON HEALTHCARE LTD | OCBC vs. RYU Apparel | OCBC vs. The Hanover Insurance | OCBC vs. Reinsurance Group of |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |