Correlation Between GlaxoSmithKline PLC and RAYTHEON

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

Diversification Opportunities for GlaxoSmithKline PLC and RAYTHEON

0.74
  Correlation Coefficient

Poor diversification

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

Pair Corralation between GlaxoSmithKline PLC and RAYTHEON

Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to generate 2.98 times more return on investment than RAYTHEON. However, GlaxoSmithKline PLC is 2.98 times more volatile than RAYTHEON TECHNOLOGIES PORATION. It trades about 0.02 of its potential returns per unit of risk. RAYTHEON TECHNOLOGIES PORATION is currently generating about -0.01 per unit of risk. If you would invest  3,273  in GlaxoSmithKline PLC ADR on August 31, 2024 and sell it today you would earn a total of  140.00  from holding GlaxoSmithKline PLC ADR or generate 4.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.93%
ValuesDaily Returns

GlaxoSmithKline PLC ADR  vs.  RAYTHEON TECHNOLOGIES PORATION

 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.
RAYTHEON TECHNOLOGIES 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days RAYTHEON TECHNOLOGIES PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RAYTHEON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

GlaxoSmithKline PLC and RAYTHEON Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GlaxoSmithKline PLC and RAYTHEON

The main advantage of trading using opposite GlaxoSmithKline PLC and RAYTHEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, RAYTHEON 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 RAYTHEON will offset losses from the drop in RAYTHEON'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 RAYTHEON TECHNOLOGIES PORATION 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.
RAYTHEON vs. Cementos Pacasmayo SAA
RAYTHEON vs. Summit Materials
RAYTHEON vs. 51Talk Online Education
RAYTHEON vs. Marchex
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Stocks Directory
Find actively traded stocks across global markets
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA


 
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