Correlation Between Capital One and Glencore Plc
Can any of the company-specific risk be diversified away by investing in both Capital One 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 Capital One and Glencore Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital One Financial and Glencore plc, you can compare the effects of market volatilities on Capital One 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 Capital One with a short position of Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital One and Glencore Plc.
Diversification Opportunities for Capital One and Glencore Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and Glencore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore plc and Capital One 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 Capital One Financial 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 Capital One i.e., Capital One and Glencore Plc go up and down completely randomly.
Pair Corralation between Capital One and Glencore Plc
If you would invest 372,475 in Capital One Financial on September 13, 2024 and sell it today you would earn a total of 6,977 from holding Capital One Financial or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital One Financial vs. Glencore plc
Performance |
| Timeline |
| Capital One Financial |
| Glencore plc |
Capital One and Glencore Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital One and Glencore Plc
The main advantage of trading using opposite Capital One and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One 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.| Capital One vs. Ameriprise Financial | Capital One vs. Deutsche Bank Aktiengesellschaft | Capital One vs. FibraHotel | Capital One vs. First Republic Bank |
| Glencore Plc vs. United Airlines Holdings | Glencore Plc vs. Hoteles City Express | Glencore Plc vs. McEwen Mining | Glencore Plc vs. FIBRA Storage |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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