Correlation Between Glencore Plc and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Glencore Plc and INSURANCE AUST 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 INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore plc and INSURANCE AUST GRP, you can compare the effects of market volatilities on Glencore Plc and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore Plc and INSURANCE AUST.
Diversification Opportunities for Glencore Plc and INSURANCE AUST
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Glencore and INSURANCE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Glencore plc and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Glencore Plc i.e., Glencore Plc and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Glencore Plc and INSURANCE AUST
Assuming the 90 days trading horizon Glencore plc is expected to under-perform the INSURANCE AUST. But the stock apears to be less risky and, when comparing its historical volatility, Glencore plc is 1.17 times less risky than INSURANCE AUST. The stock trades about -0.06 of its potential returns per unit of risk. The INSURANCE AUST GRP is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 470.00 in INSURANCE AUST GRP on September 12, 2024 and sell it today you would earn a total of 30.00 from holding INSURANCE AUST GRP or generate 6.38% 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. INSURANCE AUST GRP
Performance |
| Timeline |
| Glencore plc |
| INSURANCE AUST GRP |
Glencore Plc and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore Plc and INSURANCE AUST
The main advantage of trading using opposite Glencore Plc and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore Plc position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Glencore Plc vs. INDO RAMA SYNTHETIC | Glencore Plc vs. Federal Agricultural Mortgage | Glencore Plc vs. Sterling Construction | Glencore Plc vs. Hanison Construction Holdings |
| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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