Correlation Between Glencore PLC and Aldebaran Resources
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Aldebaran Resources 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 Aldebaran Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Aldebaran Resources, you can compare the effects of market volatilities on Glencore PLC and Aldebaran Resources 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 Aldebaran Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Aldebaran Resources.
Diversification Opportunities for Glencore PLC and Aldebaran Resources
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glencore and Aldebaran is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources 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 Aldebaran Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldebaran Resources has no effect on the direction of Glencore PLC i.e., Glencore PLC and Aldebaran Resources go up and down completely randomly.
Pair Corralation between Glencore PLC and Aldebaran Resources
Assuming the 90 days horizon Glencore PLC is expected to under-perform the Aldebaran Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC is 2.16 times less risky than Aldebaran Resources. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Aldebaran Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Aldebaran Resources on September 1, 2024 and sell it today you would earn a total of 91.00 from holding Aldebaran Resources or generate 154.24% 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. Aldebaran Resources
Performance |
| Timeline |
| Glencore PLC |
| Aldebaran Resources |
Glencore PLC and Aldebaran Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Aldebaran Resources
The main advantage of trading using opposite Glencore PLC and Aldebaran Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Aldebaran Resources 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 Aldebaran Resources will offset losses from the drop in Aldebaran Resources' long position.| Glencore PLC vs. Anglo American PLC | Glencore PLC vs. Teck Resources Ltd | Glencore PLC vs. BHP Group Limited | Glencore PLC vs. Vale SA ADR |
| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |