Correlation Between GlaxoSmithKline PLC and Sentinel Mon
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Sentinel Mon 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 Sentinel Mon 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 Sentinel Mon Stock, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Sentinel Mon 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 Sentinel Mon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Sentinel Mon.
Diversification Opportunities for GlaxoSmithKline PLC and Sentinel Mon
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Sentinel is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Sentinel Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Mon Stock 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 Sentinel Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Mon Stock has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Sentinel Mon go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Sentinel Mon
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 4.16 times less return on investment than Sentinel Mon. In addition to that, GlaxoSmithKline PLC is 1.85 times more volatile than Sentinel Mon Stock. It trades about 0.02 of its total potential returns per unit of risk. Sentinel Mon Stock is currently generating about 0.12 per unit of volatility. If you would invest 5,405 in Sentinel Mon Stock on August 31, 2024 and sell it today you would earn a total of 1,872 from holding Sentinel Mon Stock or generate 34.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Sentinel Mon Stock
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Sentinel Mon Stock |
GlaxoSmithKline PLC and Sentinel Mon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Sentinel Mon
The main advantage of trading using opposite GlaxoSmithKline PLC and Sentinel Mon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Sentinel Mon 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 Sentinel Mon will offset losses from the drop in Sentinel Mon'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 |
| Sentinel Mon vs. Aquagold International | Sentinel Mon vs. Morningstar Unconstrained Allocation | Sentinel Mon vs. Thrivent High Yield | Sentinel Mon vs. Via Renewables |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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