Correlation Between GlaxoSmithKline PLC and Steward Small-mid
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Steward Small-mid 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 Steward Small-mid 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 Steward Small Mid Cap, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Steward Small-mid 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 Steward Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Steward Small-mid.
Diversification Opportunities for GlaxoSmithKline PLC and Steward Small-mid
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Steward is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Steward Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Steward Small-mid go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Steward Small-mid
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Steward Small-mid. In addition to that, GlaxoSmithKline PLC is 1.29 times more volatile than Steward Small Mid Cap. It trades about -0.24 of its total potential returns per unit of risk. Steward Small Mid Cap is currently generating about 0.14 per unit of volatility. If you would invest 1,342 in Steward Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 133.00 from holding Steward Small Mid Cap or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Steward Small Mid Cap
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Steward Small Mid |
GlaxoSmithKline PLC and Steward Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Steward Small-mid
The main advantage of trading using opposite GlaxoSmithKline PLC and Steward Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Steward Small-mid 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 Steward Small-mid will offset losses from the drop in Steward Small-mid'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 |
| Steward Small-mid vs. Vanguard Small Cap Index | Steward Small-mid vs. T Rowe Price | Steward Small-mid vs. HUMANA INC | Steward Small-mid vs. Aquagold International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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