Correlation Between GlaxoSmithKline PLC and Wilmington International
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Wilmington International 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 Wilmington International 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 Wilmington International Fund, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Wilmington International 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 Wilmington International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Wilmington International.
Diversification Opportunities for GlaxoSmithKline PLC and Wilmington International
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GlaxoSmithKline and Wilmington is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Wilmington International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington International 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 Wilmington International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington International has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Wilmington International go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Wilmington International
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Wilmington International. In addition to that, GlaxoSmithKline PLC is 1.87 times more volatile than Wilmington International Fund. It trades about 0.0 of its total potential returns per unit of risk. Wilmington International Fund is currently generating about 0.08 per unit of volatility. If you would invest 795.00 in Wilmington International Fund on August 26, 2024 and sell it today you would earn a total of 113.00 from holding Wilmington International Fund or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Wilmington International Fund
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Wilmington International |
GlaxoSmithKline PLC and Wilmington International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Wilmington International
The main advantage of trading using opposite GlaxoSmithKline PLC and Wilmington International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Wilmington International 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 Wilmington International will offset losses from the drop in Wilmington International'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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