Correlation Between GlaxoSmithKline PLC and Horizon Us
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Horizon Us 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 Horizon Us 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 Horizon Defensive Equity, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Horizon Us 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 Horizon Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Horizon Us.
Diversification Opportunities for GlaxoSmithKline PLC and Horizon Us
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Horizon is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Horizon Defensive Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defensive Equity 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 Horizon Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defensive Equity has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Horizon Us go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Horizon Us
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Horizon Us. In addition to that, GlaxoSmithKline PLC is 1.86 times more volatile than Horizon Defensive Equity. It trades about -0.23 of its total potential returns per unit of risk. Horizon Defensive Equity is currently generating about 0.24 per unit of volatility. If you would invest 3,311 in Horizon Defensive Equity on August 31, 2024 and sell it today you would earn a total of 119.00 from holding Horizon Defensive Equity or generate 3.59% 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. Horizon Defensive Equity
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Horizon Defensive Equity |
GlaxoSmithKline PLC and Horizon Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Horizon Us
The main advantage of trading using opposite GlaxoSmithKline PLC and Horizon Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Horizon Us 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 Horizon Us will offset losses from the drop in Horizon Us' 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 |
| Horizon Us vs. The Gabelli Equity | Horizon Us vs. Ultra Short Fixed Income | Horizon Us vs. Small Cap Equity | Horizon Us vs. Ab Select Equity |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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