Correlation Between GlaxoSmithKline PLC and Oxford Nanopore
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Oxford Nanopore 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 Oxford Nanopore 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 Oxford Nanopore Technologies, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Oxford Nanopore 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 Oxford Nanopore. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Oxford Nanopore.
Diversification Opportunities for GlaxoSmithKline PLC and Oxford Nanopore
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Oxford is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Oxford Nanopore Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Nanopore Tech 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 Oxford Nanopore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Nanopore Tech has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Oxford Nanopore go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Oxford Nanopore
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Oxford Nanopore. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 5.43 times less risky than Oxford Nanopore. The stock trades about -0.23 of its potential returns per unit of risk. The Oxford Nanopore Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 189.00 in Oxford Nanopore Technologies on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Oxford Nanopore Technologies or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Oxford Nanopore Technologies
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Oxford Nanopore Tech |
GlaxoSmithKline PLC and Oxford Nanopore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Oxford Nanopore
The main advantage of trading using opposite GlaxoSmithKline PLC and Oxford Nanopore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Oxford Nanopore 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 Oxford Nanopore will offset losses from the drop in Oxford Nanopore'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 |
| Oxford Nanopore vs. Lineage Cell Therapeutics | Oxford Nanopore vs. Cadrenal Therapeutics, Common | Oxford Nanopore vs. ImmuCell | Oxford Nanopore vs. Braxia Scientific Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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