Correlation Between GlaxoSmithKline PLC and Playmaker Capital
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Playmaker Capital 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 Playmaker Capital 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 Playmaker Capital, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Playmaker Capital 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 Playmaker Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Playmaker Capital.
Diversification Opportunities for GlaxoSmithKline PLC and Playmaker Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Playmaker is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Playmaker Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playmaker Capital 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 Playmaker Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playmaker Capital has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Playmaker Capital go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Playmaker Capital
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 2.74 times less return on investment than Playmaker Capital. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 2.02 times less risky than Playmaker Capital. It trades about 0.02 of its potential returns per unit of risk. Playmaker Capital is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Playmaker Capital on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Playmaker Capital or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.57% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Playmaker Capital
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Playmaker Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Playmaker Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Playmaker Capital
The main advantage of trading using opposite GlaxoSmithKline PLC and Playmaker Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Playmaker Capital 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 Playmaker Capital will offset losses from the drop in Playmaker Capital'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 |
| Playmaker Capital vs. 888 Holdings | Playmaker Capital vs. Real Luck Group | Playmaker Capital vs. Royal Wins | Playmaker Capital vs. Betmakers Technology Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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