Correlation Between Grupo Industrial and Glencore Plc

Can any of the company-specific risk be diversified away by investing in both Grupo Industrial and Glencore 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 Grupo Industrial and Glencore Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Industrial Saltillo and Glencore plc, you can compare the effects of market volatilities on Grupo Industrial and Glencore 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 Grupo Industrial with a short position of Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Industrial and Glencore Plc.

Diversification Opportunities for Grupo Industrial and Glencore Plc

0.0

Correlation Coefficient

Grupo Industrial  Glencore Plc

Pay attention - limited upside

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

Pair Corralation between Grupo Industrial and Glencore Plc

If you would invest  1,659  in Grupo Industrial Saltillo on October 25, 2024 and sell it today you would earn a total of  115.00  from holding Grupo Industrial Saltillo or generate 6.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Grupo Industrial Saltillo  vs.  Glencore plc

Grupo Industrial Saltillo

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Industrial Saltillo are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Industrial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Glencore plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glencore plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Glencore Plc is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Grupo Industrial and Glencore Plc

The main advantage of trading using opposite Grupo Industrial and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Industrial position performs unexpectedly, Glencore 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 Glencore Plc will offset losses from the drop in Glencore Plc's long position.

The idea behind Grupo Industrial Saltillo and Glencore 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.