Correlation Between GlaxoSmithKline PLC and Savaria
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Savaria 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 Savaria 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 Savaria, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Savaria 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 Savaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Savaria.
Diversification Opportunities for GlaxoSmithKline PLC and Savaria
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between GlaxoSmithKline and Savaria is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Savaria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savaria 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 Savaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savaria has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Savaria go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Savaria
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Savaria. In addition to that, GlaxoSmithKline PLC is 1.04 times more volatile than Savaria. It trades about -0.01 of its total potential returns per unit of risk. Savaria is currently generating about 0.05 per unit of volatility. If you would invest 1,613 in Savaria on November 7, 2024 and sell it today you would earn a total of 268.00 from holding Savaria or generate 16.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Savaria
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Savaria |
GlaxoSmithKline PLC and Savaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Savaria
The main advantage of trading using opposite GlaxoSmithKline PLC and Savaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Savaria 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 Savaria will offset losses from the drop in Savaria'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 |
| Savaria vs. TFI International | Savaria vs. goeasy | Savaria vs. Enghouse Systems | Savaria vs. Exchange Income |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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