Correlation Between GlaxoSmithKline PLC and LLOYDS
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By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and LLOYDS BANKING GROUP, you can compare the effects of market volatilities on GlaxoSmithKline PLC and LLOYDS 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 LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and LLOYDS.
Diversification Opportunities for GlaxoSmithKline PLC and LLOYDS
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GlaxoSmithKline and LLOYDS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and LLOYDS BANKING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS BANKING GROUP 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 LLOYDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS BANKING GROUP has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and LLOYDS go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and LLOYDS
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 0.81 times more return on investment than LLOYDS. However, GlaxoSmithKline PLC ADR is 1.23 times less risky than LLOYDS. It trades about -0.31 of its potential returns per unit of risk. LLOYDS BANKING GROUP is currently generating about -0.26 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 | 72.73% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. LLOYDS BANKING GROUP
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| LLOYDS BANKING GROUP |
GlaxoSmithKline PLC and LLOYDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and LLOYDS
The main advantage of trading using opposite GlaxoSmithKline PLC and LLOYDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, LLOYDS 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 LLOYDS will offset losses from the drop in LLOYDS'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 |
| LLOYDS vs. AEP TEX INC | LLOYDS vs. US BANK NATIONAL | LLOYDS vs. Eat Beyond Global | LLOYDS vs. Charles Schwab Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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