Correlation Between Glencore PLC and Exemplar REITail

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

By analyzing existing cross correlation between Glencore PLC and Exemplar REITail, you can compare the effects of market volatilities on Glencore PLC and Exemplar REITail 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 Exemplar REITail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Exemplar REITail.

Diversification Opportunities for Glencore PLC and Exemplar REITail

-0.57

Correlation Coefficient

Glencore PLC  Exemplar REITail

Excellent diversification

The 3 months correlation between Glencore and Exemplar is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Exemplar REITail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exemplar REITail 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 Exemplar REITail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exemplar REITail has no effect on the direction of Glencore PLC i.e., Glencore PLC and Exemplar REITail go up and down completely randomly.

Pair Corralation between Glencore PLC and Exemplar REITail

Assuming the 90 days trading horizon Glencore PLC is expected to under-perform the Exemplar REITail. In addition to that, Glencore PLC is 1.2 times more volatile than Exemplar REITail. It trades about -0.13 of its total potential returns per unit of risk. Exemplar REITail is currently generating about 0.11 per unit of volatility. If you would invest  120,000  in Exemplar REITail on December 25, 2024 and sell it today you would earn a total of  11,000  from holding Exemplar REITail or generate 9.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Glencore PLC  vs.  Exemplar REITail

Glencore PLC

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Exemplar REITail

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exemplar REITail are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Exemplar REITail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Glencore PLC and Exemplar REITail

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

The idea behind Glencore PLC and Exemplar REITail 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 the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.