Correlation Between GlaxoSmithKline PLC and Savers Value
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Savers Value 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 Savers Value 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 Savers Value Village,, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Savers Value 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 Savers Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Savers Value.
Diversification Opportunities for GlaxoSmithKline PLC and Savers Value
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlaxoSmithKline and Savers is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Savers Value Village, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savers Value Village, 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 Savers Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savers Value Village, has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Savers Value go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Savers Value
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Savers Value. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 2.6 times less risky than Savers Value. The stock trades about -0.33 of its potential returns per unit of risk. The Savers Value Village, is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Savers Value Village, on August 27, 2024 and sell it today you would lose (87.00) from holding Savers Value Village, or give up 8.7% 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. Savers Value Village,
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Savers Value Village, |
GlaxoSmithKline PLC and Savers Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Savers Value
The main advantage of trading using opposite GlaxoSmithKline PLC and Savers Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Savers Value 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 Savers Value will offset losses from the drop in Savers Value'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 |
| Savers Value vs. Hafnia Limited | Savers Value vs. Old Dominion Freight | Savers Value vs. Scholastic | Savers Value vs. Skillful Craftsman Education |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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