Correlation Between GlaxoSmithKline PLC and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Amplify ETF 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 Amplify ETF 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 Amplify ETF Trust, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Amplify ETF 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 Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Amplify ETF.
Diversification Opportunities for GlaxoSmithKline PLC and Amplify ETF
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Amplify is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust 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 Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Amplify ETF go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Amplify ETF
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.56 times more return on investment than Amplify ETF. However, GlaxoSmithKline PLC ADR is 1.8 times less risky than Amplify ETF. It trades about -0.3 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.35 per unit of risk. If you would invest 3,745 in GlaxoSmithKline PLC ADR on August 28, 2024 and sell it today you would lose (330.00) from holding GlaxoSmithKline PLC ADR or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Amplify ETF Trust
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Amplify ETF Trust |
GlaxoSmithKline PLC and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Amplify ETF
The main advantage of trading using opposite GlaxoSmithKline PLC and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Amplify ETF 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 Amplify ETF will offset losses from the drop in Amplify ETF'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 |
| Amplify ETF vs. iShares Silver Trust | Amplify ETF vs. SPDR Gold Shares | Amplify ETF vs. Newmont Goldcorp Corp | Amplify ETF vs. Direxion Daily Gold |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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