Correlation Between Zeder Investments and Glencore PLC

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

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

Diversification Opportunities for Zeder Investments and Glencore PLC

0.76

Correlation Coefficient

Zeder Investments  Glencore PLC

Poor diversification

The 3 months correlation between Zeder and Glencore is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zeder Investments and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC and Zeder Investments 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 Zeder Investments 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 Zeder Investments i.e., Zeder Investments and Glencore PLC go up and down completely randomly.

Pair Corralation between Zeder Investments and Glencore PLC

Assuming the 90 days trading horizon Zeder Investments is expected to generate 1.43 times more return on investment than Glencore PLC. However, Zeder Investments is 1.43 times more volatile than Glencore PLC. It trades about -0.03 of its potential returns per unit of risk. Glencore PLC is currently generating about -0.08 per unit of risk. If you would invest  19,200  in Zeder Investments on September 16, 2024 and sell it today you would lose (2,200) from holding Zeder Investments or give up 11.46% of portfolio value over 90 days.

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

Zeder Investments  vs.  Glencore PLC

Zeder Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zeder Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 rather sound technical and fundamental indicators, Glencore PLC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zeder Investments and Glencore PLC

The main advantage of trading using opposite Zeder Investments and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeder Investments 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 Zeder Investments 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.