Correlation Between Huntsman Exploration and Glencore PLC
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration 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 Huntsman Exploration and Glencore PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and Glencore PLC, you can compare the effects of market volatilities on Huntsman Exploration 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 Huntsman Exploration with a short position of Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and Glencore PLC.
Diversification Opportunities for Huntsman Exploration and Glencore PLC
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huntsman and Glencore is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC and Huntsman Exploration 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 Huntsman Exploration 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 Huntsman Exploration i.e., Huntsman Exploration and Glencore PLC go up and down completely randomly.
Pair Corralation between Huntsman Exploration and Glencore PLC
Assuming the 90 days horizon Huntsman Exploration is expected to under-perform the Glencore PLC. In addition to that, Huntsman Exploration is 5.6 times more volatile than Glencore PLC. It trades about -0.21 of its total potential returns per unit of risk. Glencore PLC is currently generating about -0.19 per unit of volatility. If you would invest 529.00 in Glencore PLC on August 30, 2024 and sell it today you would lose (51.00) from holding Glencore PLC or give up 9.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntsman Exploration vs. Glencore PLC
Performance |
| Timeline |
| Huntsman Exploration |
| Glencore PLC |
Huntsman Exploration and Glencore PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and Glencore PLC
The main advantage of trading using opposite Huntsman Exploration and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration 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.| Huntsman Exploration vs. Rockridge Resources | Huntsman Exploration vs. Ameriwest Lithium | Huntsman Exploration vs. Osisko Metals Incorporated | Huntsman Exploration vs. Volt Lithium Corp |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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