Correlation Between GlaxoSmithKline PLC and Penguin Solutions,
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Penguin Solutions, 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 Penguin Solutions, 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 Penguin Solutions,, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Penguin Solutions, 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 Penguin Solutions,. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Penguin Solutions,.
Diversification Opportunities for GlaxoSmithKline PLC and Penguin Solutions,
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlaxoSmithKline and Penguin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Penguin Solutions, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penguin Solutions, 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 Penguin Solutions,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penguin Solutions, has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Penguin Solutions, go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Penguin Solutions,
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Penguin Solutions,. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.07 times less risky than Penguin Solutions,. The stock trades about -0.3 of its potential returns per unit of risk. The Penguin Solutions, is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,537 in Penguin Solutions, on August 28, 2024 and sell it today you would earn a total of 271.00 from holding Penguin Solutions, or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Penguin Solutions,
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Penguin Solutions, |
GlaxoSmithKline PLC and Penguin Solutions, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Penguin Solutions,
The main advantage of trading using opposite GlaxoSmithKline PLC and Penguin Solutions, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Penguin Solutions, 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 Penguin Solutions, will offset losses from the drop in Penguin Solutions,'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 |
| Penguin Solutions, vs. Aeye Inc | Penguin Solutions, vs. SunOpta | Penguin Solutions, vs. National Vision Holdings | Penguin Solutions, vs. Rivian Automotive |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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