Correlation Between GlaxoSmithKline PLC and PLNIJ

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and PLNIJ 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 PLNIJ 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 PLNIJ 4125 15 MAY 27, you can compare the effects of market volatilities on GlaxoSmithKline PLC and PLNIJ 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 PLNIJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and PLNIJ.

Diversification Opportunities for GlaxoSmithKline PLC and PLNIJ

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GlaxoSmithKline and PLNIJ is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and PLNIJ 4125 15 MAY 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLNIJ 4125 15 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 PLNIJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLNIJ 4125 15 has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and PLNIJ go up and down completely randomly.

Pair Corralation between GlaxoSmithKline PLC and PLNIJ

Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the PLNIJ. In addition to that, GlaxoSmithKline PLC is 2.11 times more volatile than PLNIJ 4125 15 MAY 27. It trades about -0.25 of its total potential returns per unit of risk. PLNIJ 4125 15 MAY 27 is currently generating about -0.4 per unit of volatility. If you would invest  9,863  in PLNIJ 4125 15 MAY 27 on August 28, 2024 and sell it today you would lose (350.00) from holding PLNIJ 4125 15 MAY 27 or give up 3.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy20.63%
ValuesDaily Returns

GlaxoSmithKline PLC ADR  vs.  PLNIJ 4125 15 MAY 27

 Performance 
       Timeline  
GlaxoSmithKline PLC ADR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GlaxoSmithKline PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
PLNIJ 4125 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PLNIJ 4125 15 MAY 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for PLNIJ 4125 15 MAY 27 investors.

GlaxoSmithKline PLC and PLNIJ Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GlaxoSmithKline PLC and PLNIJ

The main advantage of trading using opposite GlaxoSmithKline PLC and PLNIJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, PLNIJ 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 PLNIJ will offset losses from the drop in PLNIJ'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
The idea behind GlaxoSmithKline PLC ADR and PLNIJ 4125 15 MAY 27 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
PLNIJ vs. GoHealth
PLNIJ vs. Assurant
PLNIJ vs. Pekin Life Insurance
PLNIJ vs. Willamette Valley Vineyards
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Stocks Directory
Find actively traded stocks across global markets
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY