Correlation Between GlaxoSmithKline PLC and Thornburg Core
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Thornburg Core 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 Thornburg Core 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 Thornburg E Growth, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Thornburg Core 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 Thornburg Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Thornburg Core.
Diversification Opportunities for GlaxoSmithKline PLC and Thornburg Core
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Thornburg is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth 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 Thornburg Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Thornburg Core go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Thornburg Core
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 4.35 times less return on investment than Thornburg Core. In addition to that, GlaxoSmithKline PLC is 1.12 times more volatile than Thornburg E Growth. It trades about 0.01 of its total potential returns per unit of risk. Thornburg E Growth is currently generating about 0.07 per unit of volatility. If you would invest 2,496 in Thornburg E Growth on August 26, 2024 and sell it today you would earn a total of 683.00 from holding Thornburg E Growth or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Thornburg E Growth
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Thornburg E Growth |
GlaxoSmithKline PLC and Thornburg Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Thornburg Core
The main advantage of trading using opposite GlaxoSmithKline PLC and Thornburg Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Thornburg Core 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 Thornburg Core will offset losses from the drop in Thornburg Core'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 |
| Thornburg Core vs. Thornburg Value Fund | Thornburg Core vs. Thornburg Value Fund | Thornburg Core vs. Thornburg International Value | Thornburg Core vs. Thornburg International Value |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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