Correlation Between Glencore Plc and Compaa Minera

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

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

Diversification Opportunities for Glencore Plc and Compaa Minera

0.0

Correlation Coefficient

Glencore Plc  Compaa Minera

Pay attention - limited upside

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

Pair Corralation between Glencore Plc and Compaa Minera

Assuming the 90 days trading horizon Glencore plc is expected to generate 0.66 times more return on investment than Compaa Minera. However, Glencore plc is 1.53 times less risky than Compaa Minera. It trades about -0.04 of its potential returns per unit of risk. Compaa Minera Autln is currently generating about -0.07 per unit of risk. If you would invest  11,420  in Glencore plc on September 23, 2024 and sell it today you would lose (2,431) from holding Glencore plc or give up 21.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.72%
Values	Daily Returns

Glencore plc  vs.  Compaa Minera Autln

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.

Compaa Minera Autln

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compaa Minera Autln has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Compaa Minera is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Glencore Plc and Compaa Minera

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

The idea behind Glencore plc and Compaa Minera Autln 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.