Correlation Between GlaxoSmithKline PLC and SUPER GROUP
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and SUPER GROUP 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 SUPER GROUP 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 SUPER GROUP LTD, you can compare the effects of market volatilities on GlaxoSmithKline PLC and SUPER GROUP 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 SUPER GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and SUPER GROUP.
Diversification Opportunities for GlaxoSmithKline PLC and SUPER GROUP
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and SUPER is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and SUPER GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER GROUP LTD 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 SUPER GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER GROUP LTD has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and SUPER GROUP go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and SUPER GROUP
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the SUPER GROUP. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 3.56 times less risky than SUPER GROUP. The stock trades about -0.3 of its potential returns per unit of risk. The SUPER GROUP LTD is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 119.00 in SUPER GROUP LTD on August 28, 2024 and sell it today you would earn a total of 29.00 from holding SUPER GROUP LTD or generate 24.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. SUPER GROUP LTD
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| SUPER GROUP LTD |
GlaxoSmithKline PLC and SUPER GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and SUPER GROUP
The main advantage of trading using opposite GlaxoSmithKline PLC and SUPER GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, SUPER GROUP 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 SUPER GROUP will offset losses from the drop in SUPER GROUP'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 |
| SUPER GROUP vs. Commercial Vehicle Group | SUPER GROUP vs. Daido Steel Co | SUPER GROUP vs. ALGOMA STEEL GROUP | SUPER GROUP vs. CVW CLEANTECH INC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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