Correlation Between GlaxoSmithKline PLC and Star Alliance
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Star Alliance 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 Star Alliance 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 Star Alliance International, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Star Alliance 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 Star Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Star Alliance.
Diversification Opportunities for GlaxoSmithKline PLC and Star Alliance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and Star is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Star Alliance International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Alliance Intern 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 Star Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Alliance Intern has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Star Alliance go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Star Alliance
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.14 times more return on investment than Star Alliance. However, GlaxoSmithKline PLC ADR is 7.22 times less risky than Star Alliance. It trades about -0.31 of its potential returns per unit of risk. Star Alliance International is currently generating about -0.09 per unit of risk. If you would invest 3,745 in GlaxoSmithKline PLC ADR on August 29, 2024 and sell it today you would lose (343.00) from holding GlaxoSmithKline PLC ADR or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Star Alliance International
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Star Alliance Intern |
GlaxoSmithKline PLC and Star Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Star Alliance
The main advantage of trading using opposite GlaxoSmithKline PLC and Star Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Star Alliance 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 Star Alliance will offset losses from the drop in Star Alliance'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 |
| Star Alliance vs. Vior Inc | Star Alliance vs. Norsemont Mining | Star Alliance vs. Big Ridge Gold | Star Alliance vs. Cerrado 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |