Correlation Between GlaxoSmithKline PLC and Rimini Street
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Rimini Street 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 Rimini Street 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 Rimini Street, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Rimini Street 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 Rimini Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Rimini Street.
Diversification Opportunities for GlaxoSmithKline PLC and Rimini Street
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Rimini is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Rimini Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimini Street 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 Rimini Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimini Street has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Rimini Street go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Rimini Street
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Rimini Street. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.69 times less risky than Rimini Street. The stock trades about -0.3 of its potential returns per unit of risk. The Rimini Street is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Rimini Street on August 28, 2024 and sell it today you would earn a total of 32.00 from holding Rimini Street or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Rimini Street
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Rimini Street |
GlaxoSmithKline PLC and Rimini Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Rimini Street
The main advantage of trading using opposite GlaxoSmithKline PLC and Rimini Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Rimini Street 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 Rimini Street will offset losses from the drop in Rimini Street'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 |
| Rimini Street vs. Issuer Direct Corp | Rimini Street vs. Cambium Networks Corp | Rimini Street vs. OneSpan | Rimini Street vs. Kiniksa Pharmaceuticals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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