Correlation Between American Helium and Glencore PLC
Can any of the company-specific risk be diversified away by investing in both American Helium 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 American Helium and Glencore PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Helium and Glencore PLC, you can compare the effects of market volatilities on American Helium 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 American Helium with a short position of Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Helium and Glencore PLC.
Diversification Opportunities for American Helium and Glencore PLC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Glencore is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Helium and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC and American Helium 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 American Helium 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 American Helium i.e., American Helium and Glencore PLC go up and down completely randomly.
Pair Corralation between American Helium and Glencore PLC
Assuming the 90 days horizon American Helium is expected to generate 0.94 times more return on investment than Glencore PLC. However, American Helium is 1.07 times less risky than Glencore PLC. It trades about 0.21 of its potential returns per unit of risk. Glencore PLC is currently generating about -0.19 per unit of risk. If you would invest 10.00 in American Helium on August 30, 2024 and sell it today you would earn a total of 1.00 from holding American Helium or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Helium vs. Glencore PLC
Performance |
| Timeline |
| American Helium |
| Glencore PLC |
American Helium and Glencore PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Helium and Glencore PLC
The main advantage of trading using opposite American Helium and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Helium 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.| American Helium vs. Huntsman Exploration | American Helium vs. Aurelia Metals Limited | American Helium vs. Adriatic Metals PLC | American Helium vs. Progressive Planet Solutions |
| Glencore PLC vs. Anglo American PLC | Glencore PLC vs. Teck Resources Ltd | Glencore PLC vs. BHP Group Limited | Glencore PLC vs. Vale SA ADR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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