Correlation Between GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE

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Can any of the company-specific risk be diversified away by investing in both GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE 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 COMPREHENSIVE CARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLAXOSMITHKLINE PLC ORD and COMPREHENSIVE CARE CORP, you can compare the effects of market volatilities on GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE 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 COMPREHENSIVE CARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE.

Diversification Opportunities for GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GLAXOSMITHKLINE and COMPREHENSIVE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLAXOSMITHKLINE PLC ORD 25P and COMPREHENSIVE CARE CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPREHENSIVE CARE CORP 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 ORD are associated (or correlated) with COMPREHENSIVE CARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPREHENSIVE CARE CORP has no effect on the direction of GLAXOSMITHKLINE PLC i.e., GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE go up and down completely randomly.

Pair Corralation between GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE

Assuming the 90 days horizon GLAXOSMITHKLINE PLC is expected to generate 8.36 times less return on investment than COMPREHENSIVE CARE. But when comparing it to its historical volatility, GLAXOSMITHKLINE PLC ORD is 13.13 times less risky than COMPREHENSIVE CARE. It trades about 0.04 of its potential returns per unit of risk. COMPREHENSIVE CARE CORP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  26.00  in COMPREHENSIVE CARE CORP on May 9, 2022 and sell it today you would lose (25.99)  from holding COMPREHENSIVE CARE CORP or give up 99.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

GLAXOSMITHKLINE PLC ORD 25P  vs.  COMPREHENSIVE CARE CORP

 Performance (%) 
       Timeline  
GLAXOSMITHKLINE PLC ORD 
GLAXOSMITHKLINE Performance
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Over the last 90 days GLAXOSMITHKLINE PLC ORD has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, GLAXOSMITHKLINE PLC is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

GLAXOSMITHKLINE Price Channel

COMPREHENSIVE CARE CORP 
COMPREHENSIVE Performance
0 of 100
Over the last 90 days COMPREHENSIVE CARE CORP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, COMPREHENSIVE CARE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

COMPREHENSIVE Price Channel

GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE

The main advantage of trading using opposite GLAXOSMITHKLINE PLC and COMPREHENSIVE CARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLAXOSMITHKLINE PLC position performs unexpectedly, COMPREHENSIVE CARE 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 COMPREHENSIVE CARE will offset losses from the drop in COMPREHENSIVE CARE's long position.
The idea behind GLAXOSMITHKLINE PLC ORD and COMPREHENSIVE CARE CORP 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.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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