Correlation Between GlaxoSmithKline PLC and Orezone Gold
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Orezone Gold 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 Orezone Gold 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 Orezone Gold Corp, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Orezone Gold 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 Orezone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Orezone Gold.
Diversification Opportunities for GlaxoSmithKline PLC and Orezone Gold
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Orezone is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Orezone Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orezone Gold Corp 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 Orezone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orezone Gold Corp has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Orezone Gold go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Orezone Gold
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Orezone Gold. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.66 times less risky than Orezone Gold. The stock trades about -0.25 of its potential returns per unit of risk. The Orezone Gold Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Orezone Gold Corp on August 29, 2024 and sell it today you would lose (6.00) from holding Orezone Gold Corp or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Orezone Gold Corp
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Orezone Gold Corp |
GlaxoSmithKline PLC and Orezone Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Orezone Gold
The main advantage of trading using opposite GlaxoSmithKline PLC and Orezone Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Orezone Gold 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 Orezone Gold will offset losses from the drop in Orezone Gold'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 |
| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold Resources |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |