Correlation Between GlaxoSmithKline PLC and All Iron
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and All Iron 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 All Iron 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 All Iron Re, you can compare the effects of market volatilities on GlaxoSmithKline PLC and All Iron 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 All Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and All Iron.
Diversification Opportunities for GlaxoSmithKline PLC and All Iron
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlaxoSmithKline and All is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and All Iron Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Iron Re 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 All Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Iron Re has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and All Iron go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and All Iron
Considering the 90-day investment horizon GlaxoSmithKline PLC ADR is expected to under-perform the All Iron. In addition to that, GlaxoSmithKline PLC is 1.55 times more volatile than All Iron Re. It trades about -0.3 of its total potential returns per unit of risk. All Iron Re is currently generating about -0.05 per unit of volatility. If you would invest 1,060 in All Iron Re on August 28, 2024 and sell it today you would lose (10.00) from holding All Iron Re or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. All Iron Re
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| All Iron Re |
GlaxoSmithKline PLC and All Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and All Iron
The main advantage of trading using opposite GlaxoSmithKline PLC and All Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, All Iron 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 All Iron will offset losses from the drop in All Iron'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 |
| All Iron vs. Melia Hotels | All Iron vs. Vytrus Biotech SA | All Iron vs. Aedas Homes SL | All Iron vs. International Consolidated Airlines |
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.
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