Correlation Between GlaxoSmithKline PLC and Winner Group
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Winner Group 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 Winner Group 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 Winner Group Enterprise, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Winner Group 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 Winner Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Winner Group.
Diversification Opportunities for GlaxoSmithKline PLC and Winner Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Winner is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Winner Group Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Group Enterprise 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 Winner Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Group Enterprise has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Winner Group go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Winner Group
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 173.19 times less return on investment than Winner Group. But when comparing it to its historical volatility, GlaxoSmithKline PLC ADR is 36.35 times less risky than Winner Group. It trades about 0.01 of its potential returns per unit of risk. Winner Group Enterprise is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Winner Group Enterprise on August 29, 2024 and sell it today you would lose (4.00) from holding Winner Group Enterprise or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Winner Group Enterprise
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Winner Group Enterprise |
GlaxoSmithKline PLC and Winner Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Winner Group
The main advantage of trading using opposite GlaxoSmithKline PLC and Winner Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Winner Group 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 Winner Group will offset losses from the drop in Winner Group'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 |
| Winner Group vs. T S Flour | Winner Group vs. Vintcom Technology PCL | Winner Group vs. Thanapiriya Public | Winner Group vs. Ubis Public |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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