Correlation Between GlaxoSmithKline PLC and Xencor
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Xencor 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 Xencor 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 Xencor Inc, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Xencor 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 Xencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Xencor.
Diversification Opportunities for GlaxoSmithKline PLC and Xencor
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and Xencor is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Xencor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xencor Inc 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 Xencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xencor Inc has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Xencor go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Xencor
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the Xencor. But the stock apears to be less risky and, when comparing its historical volatility, GlaxoSmithKline PLC ADR is 1.28 times less risky than Xencor. The stock trades about -0.3 of its potential returns per unit of risk. The Xencor Inc is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 2,116 in Xencor Inc on August 25, 2024 and sell it today you would earn a total of 385.00 from holding Xencor Inc or generate 18.19% 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. Xencor Inc
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Xencor Inc |
GlaxoSmithKline PLC and Xencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Xencor
The main advantage of trading using opposite GlaxoSmithKline PLC and Xencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Xencor 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 Xencor will offset losses from the drop in Xencor'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 |
| Xencor vs. Edgewise Therapeutics | Xencor vs. Keros Therapeutics | Xencor vs. Monte Rosa Therapeutics | Xencor vs. Mineralys Therapeutics, Common |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |