Correlation Between Sayona Mining and Glencore PLC

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

By analyzing existing cross correlation between Sayona Mining Limited and Glencore PLC, you can compare the effects of market volatilities on Sayona Mining 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 Sayona Mining with a short position of Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sayona Mining and Glencore PLC.

Diversification Opportunities for Sayona Mining and Glencore PLC

0.65

Correlation Coefficient

Sayona Mining  Glencore PLC

Poor diversification

The 3 months correlation between Sayona and Glencore is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining Limited and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC and Sayona Mining 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 Sayona Mining Limited 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 Sayona Mining i.e., Sayona Mining and Glencore PLC go up and down completely randomly.

Pair Corralation between Sayona Mining and Glencore PLC

Assuming the 90 days horizon Sayona Mining Limited is expected to under-perform the Glencore PLC. In addition to that, Sayona Mining is 3.84 times more volatile than Glencore PLC. It trades about -0.05 of its total potential returns per unit of risk. Glencore PLC is currently generating about -0.09 per unit of volatility. If you would invest  438.00  in Glencore PLC on December 30, 2024 and sell it today you would lose (58.00) from holding Glencore PLC or give up 13.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sayona Mining Limited  vs.  Glencore PLC

Sayona Mining Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sayona Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sayona Mining and Glencore PLC

The main advantage of trading using opposite Sayona Mining and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sayona Mining 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 Sayona Mining Limited 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.