Correlation Between GW Pharmaceuticals and GlaxoSmithKline PLC
Can any of the company-specific risk be diversified away by investing in both GW Pharmaceuticals 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 GW Pharmaceuticals and GlaxoSmithKline PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GW Pharmaceuticals Plc and GlaxoSmithKline PLC ADR, you can compare the effects of market volatilities on GW Pharmaceuticals 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 GW Pharmaceuticals with a short position of GlaxoSmithKline PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GW Pharmaceuticals and GlaxoSmithKline PLC.
Diversification Opportunities for GW Pharmaceuticals and GlaxoSmithKline PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GWPH and GlaxoSmithKline is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GW Pharmaceuticals 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 GW Pharmaceuticals 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 GW Pharmaceuticals 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 GW Pharmaceuticals i.e., GW Pharmaceuticals and GlaxoSmithKline PLC go up and down completely randomly.
Pair Corralation between GW Pharmaceuticals and GlaxoSmithKline PLC
If you would invest 4,153 in GlaxoSmithKline PLC ADR on January 26, 2024 and sell it today you would lose (67.00) from holding GlaxoSmithKline PLC ADR or give up 1.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
GW Pharmaceuticals Plc vs. GlaxoSmithKline PLC ADR
Performance |
Timeline |
GW Pharmaceuticals Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC ADR |
GW Pharmaceuticals and GlaxoSmithKline PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GW Pharmaceuticals and GlaxoSmithKline PLC
The main advantage of trading using opposite GW Pharmaceuticals and GlaxoSmithKline PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GW Pharmaceuticals 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.GW Pharmaceuticals vs. Arbor Metals Corp | GW Pharmaceuticals vs. US GoldMining Common | GW Pharmaceuticals vs. East Africa Metals | GW Pharmaceuticals vs. Forsys Metals Corp |
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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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