Correlation Between Glencore Plc and Minera Frisco

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

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

Diversification Opportunities for Glencore Plc and Minera Frisco

0.0

Correlation Coefficient

Glencore Plc  Minera Frisco

Pay attention - limited upside

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

Pair Corralation between Glencore Plc and Minera Frisco

Assuming the 90 days trading horizon Glencore plc is expected to under-perform the Minera Frisco. But the stock apears to be less risky and, when comparing its historical volatility, Glencore plc is 2.07 times less risky than Minera Frisco. The stock trades about -0.04 of its potential returns per unit of risk. The Minera Frisco SAB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  268.00  in Minera Frisco SAB on September 23, 2024 and sell it today you would earn a total of  72.00  from holding Minera Frisco SAB or generate 26.87% return on investment over 90 days.

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

Glencore plc  vs.  Minera Frisco SAB

Glencore plc

Risk-Adjusted Performance

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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.

Minera Frisco SAB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Glencore Plc and Minera Frisco

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

The idea behind Glencore plc and Minera Frisco SAB 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.