Correlation Between Glencore PLC and Bitterroot Resources
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Bitterroot 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 Bitterroot 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 Bitterroot Resources, you can compare the effects of market volatilities on Glencore PLC and Bitterroot 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 Bitterroot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Bitterroot Resources.
Diversification Opportunities for Glencore PLC and Bitterroot Resources
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glencore and Bitterroot is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Bitterroot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitterroot 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 Bitterroot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitterroot Resources has no effect on the direction of Glencore PLC i.e., Glencore PLC and Bitterroot Resources go up and down completely randomly.
Pair Corralation between Glencore PLC and Bitterroot Resources
Assuming the 90 days horizon Glencore PLC is expected to under-perform the Bitterroot Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC is 9.2 times less risky than Bitterroot Resources. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Bitterroot Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.73 in Bitterroot Resources on August 30, 2024 and sell it today you would earn a total of 1.27 from holding Bitterroot Resources or generate 73.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC vs. Bitterroot Resources
Performance |
| Timeline |
| Glencore PLC |
| Bitterroot Resources |
Glencore PLC and Bitterroot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Bitterroot Resources
The main advantage of trading using opposite Glencore PLC and Bitterroot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Bitterroot 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 Bitterroot Resources will offset losses from the drop in Bitterroot 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 |
| Bitterroot Resources vs. Golden Lake Exploration | Bitterroot Resources vs. Transition Metals Corp | Bitterroot Resources vs. Vendetta Mining Corp | Bitterroot Resources vs. Bayhorse Silver |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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