Correlation Between FIBRA Storage and GlaxoSmithKline Plc

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Can any of the company-specific risk be diversified away by investing in both FIBRA Storage 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 FIBRA Storage and GlaxoSmithKline Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIBRA Storage and GlaxoSmithKline plc, you can compare the effects of market volatilities on FIBRA Storage 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 FIBRA Storage with a short position of GlaxoSmithKline Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIBRA Storage and GlaxoSmithKline Plc.

Diversification Opportunities for FIBRA Storage and GlaxoSmithKline Plc

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between FIBRA and GlaxoSmithKline is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage and GlaxoSmithKline plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlaxoSmithKline plc and FIBRA Storage 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 FIBRA Storage 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 has no effect on the direction of FIBRA Storage i.e., FIBRA Storage and GlaxoSmithKline Plc go up and down completely randomly.

Pair Corralation between FIBRA Storage and GlaxoSmithKline Plc

Assuming the 90 days trading horizon FIBRA Storage is expected to generate 0.25 times more return on investment than GlaxoSmithKline Plc. However, FIBRA Storage is 3.99 times less risky than GlaxoSmithKline Plc. It trades about 0.18 of its potential returns per unit of risk. GlaxoSmithKline plc is currently generating about -0.03 per unit of risk. If you would invest  1,730  in FIBRA Storage on September 5, 2024 and sell it today you would earn a total of  60.00  from holding FIBRA Storage or generate 3.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

FIBRA Storage  vs.  GlaxoSmithKline plc

 Performance 
       Timeline  
FIBRA Storage 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.
GlaxoSmithKline plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GlaxoSmithKline plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GlaxoSmithKline Plc is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FIBRA Storage and GlaxoSmithKline Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FIBRA Storage and GlaxoSmithKline Plc

The main advantage of trading using opposite FIBRA Storage and GlaxoSmithKline Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBRA Storage 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.
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The idea behind FIBRA Storage and GlaxoSmithKline plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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