Correlation Between Horizon Pharma and GlaxoSmithKline PLC
Can any of the company-specific risk be diversified away by investing in both Horizon Pharma and GlaxoSmithKline PLC 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 Horizon Pharma and GlaxoSmithKline PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Pharma PLC and GlaxoSmithKline PLC ADR, you can compare the effects of market volatilities on Horizon Pharma and GlaxoSmithKline PLC 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 Horizon Pharma with a short position of GlaxoSmithKline PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Pharma and GlaxoSmithKline PLC.
Diversification Opportunities for Horizon Pharma and GlaxoSmithKline PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Horizon and GlaxoSmithKline is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Pharma PLC and GlaxoSmithKline PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlaxoSmithKline PLC ADR and Horizon Pharma 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 Horizon Pharma PLC are associated (or correlated) with GlaxoSmithKline PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlaxoSmithKline PLC ADR has no effect on the direction of Horizon Pharma i.e., Horizon Pharma and GlaxoSmithKline PLC go up and down completely randomly.
Pair Corralation between Horizon Pharma and GlaxoSmithKline PLC
If you would invest 10,040 in Horizon Pharma PLC on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Horizon Pharma PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Horizon Pharma PLC vs. GlaxoSmithKline PLC ADR
Performance |
| Timeline |
| Horizon Pharma PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| GlaxoSmithKline PLC ADR |
Horizon Pharma and GlaxoSmithKline PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Pharma and GlaxoSmithKline PLC
The main advantage of trading using opposite Horizon Pharma and GlaxoSmithKline PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Pharma position performs unexpectedly, GlaxoSmithKline PLC 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 GlaxoSmithKline PLC will offset losses from the drop in GlaxoSmithKline PLC's long position.| Horizon Pharma vs. Bristol Myers Squibb | Horizon Pharma vs. AbbVie Inc | Horizon Pharma vs. Merck Company | Horizon Pharma vs. Gilead Sciences |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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