Correlation Between GlaxoSmithKline PLC and ODIN Investments
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and ODIN Investments 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 ODIN Investments 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 ODIN Investments, you can compare the effects of market volatilities on GlaxoSmithKline PLC and ODIN Investments 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 ODIN Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and ODIN Investments.
Diversification Opportunities for GlaxoSmithKline PLC and ODIN Investments
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GlaxoSmithKline and ODIN is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and ODIN Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODIN Investments 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 ODIN Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODIN Investments has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and ODIN Investments go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and ODIN Investments
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the ODIN Investments. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.32 times less risky than ODIN Investments. The stock trades about -0.3 of its potential returns per unit of risk. The ODIN Investments is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 198.00 in ODIN Investments on August 27, 2024 and sell it today you would earn a total of 2.00 from holding ODIN Investments or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. ODIN Investments
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| ODIN Investments |
GlaxoSmithKline PLC and ODIN Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and ODIN Investments
The main advantage of trading using opposite GlaxoSmithKline PLC and ODIN Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, ODIN Investments 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 ODIN Investments will offset losses from the drop in ODIN Investments' 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 |
| ODIN Investments vs. Egyptian Gulf Bank | ODIN Investments vs. National Bank | ODIN Investments vs. Suez Canal Bank | ODIN Investments vs. Misr Financial Investments |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges |