Correlation Between Glencore PLC and Boss Resources
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Boss 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 Boss 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 Boss Resources, you can compare the effects of market volatilities on Glencore PLC and Boss 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 Boss Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Boss Resources.
Diversification Opportunities for Glencore PLC and Boss Resources
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Boss is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Boss Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss 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 Boss Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Resources has no effect on the direction of Glencore PLC i.e., Glencore PLC and Boss Resources go up and down completely randomly.
Pair Corralation between Glencore PLC and Boss Resources
Assuming the 90 days horizon Glencore PLC is expected to generate 0.71 times more return on investment than Boss Resources. However, Glencore PLC is 1.42 times less risky than Boss Resources. It trades about -0.18 of its potential returns per unit of risk. Boss Resources is currently generating about -0.17 per unit of risk. If you would invest 525.00 in Glencore PLC on August 29, 2024 and sell it today you would lose (47.00) from holding Glencore PLC or give up 8.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC vs. Boss Resources
Performance |
| Timeline |
| Glencore PLC |
| Boss Resources |
Glencore PLC and Boss Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Boss Resources
The main advantage of trading using opposite Glencore PLC and Boss Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Boss 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 Boss Resources will offset losses from the drop in Boss 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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world |