Correlation Between GlaxoSmithKline PLC and Gilead Sciences

By analyzing existing cross correlation between GlaxoSmithKline PLC and Gilead Sciences, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Gilead Sciences 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 Gilead Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Gilead Sciences.

Specify exactly 2 symbols:

Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Gilead Sciences 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 Gilead Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for GlaxoSmithKline PLC and Gilead Sciences

0.49
  Correlation Coefficient
GlaxoSmithKline PLC
Gilead Sciences

Very weak diversification

The 3 months correlation between GlaxoSmithKline and Gilead is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC and Gilead Sciences Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Gilead Sciences 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 are associated (or correlated) with Gilead Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilead Sciences has no effect on the direction of GlaxoSmithKline PLC i.e. GlaxoSmithKline PLC and Gilead Sciences go up and down completely randomly.

Pair Corralation between GlaxoSmithKline PLC and Gilead Sciences

Considering the 30-days investment horizon, GlaxoSmithKline PLC is expected to generate 3.68 times less return on investment than Gilead Sciences. But when comparing it to its historical volatility, GlaxoSmithKline PLC is 1.78 times less risky than Gilead Sciences. It trades about 0.01 of its potential returns per unit of risk. Gilead Sciences is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,463  in Gilead Sciences on June 14, 2020 and sell it today you would earn a total of  205.00  from holding Gilead Sciences or generate 2.75% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

GlaxoSmithKline PLC  vs.  Gilead Sciences Inc

 Performance (%) 
      Timeline 
GlaxoSmithKline PLC 
00

GlaxoSmithKline PLC Risk-Adjusted Performance

Over the last 30 days GlaxoSmithKline PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Regardless of fairly strong basic indicators, GlaxoSmithKline PLC is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Gilead Sciences 
22

Gilead Sciences Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Gilead Sciences are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days. In spite of rather sound basic indicators, Gilead Sciences is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

GlaxoSmithKline PLC and Gilead Sciences Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Premium Stories module to follow macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.


 
Macroaxis is not a registered investment advisor or broker/dealer. All investments, including stocks, funds, ETFs, or cryptocurrencies, are speculative and involve substantial risk of loss. We encourage our investors to invest carefully. Much of our information is derived directly from data published by companies or submitted to governmental agencies which we believe are reliable, but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way warrant or guarantee the success of any action you take in reliance on our statements or recommendations. Also, note that past performance is not necessarily indicative of future results. All investments carry risk, and all investment decisions of an individual remain the responsibility of that individual. There is no guarantee that systems, indicators, or signals will result in profits or that they will not result in losses. All investors are advised to fully understand all risks associated with any investing they choose to do. Hypothetical or simulated performance is not indicative of future results. We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown because hypothetical or simulated performance is not necessarily indicative of future results. For more information please visit our terms and condition page