Correlation Between Glencore PLC and Edison Cobalt
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Edison Cobalt 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 Edison Cobalt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Edison Cobalt Corp, you can compare the effects of market volatilities on Glencore PLC and Edison Cobalt 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 Edison Cobalt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Edison Cobalt.
Diversification Opportunities for Glencore PLC and Edison Cobalt
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Glencore and Edison is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Edison Cobalt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Cobalt Corp 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 Edison Cobalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Cobalt Corp has no effect on the direction of Glencore PLC i.e., Glencore PLC and Edison Cobalt go up and down completely randomly.
Pair Corralation between Glencore PLC and Edison Cobalt
Assuming the 90 days horizon Glencore PLC is expected to generate 0.35 times more return on investment than Edison Cobalt. However, Glencore PLC is 2.89 times less risky than Edison Cobalt. It trades about -0.19 of its potential returns per unit of risk. Edison Cobalt Corp is currently generating about -0.13 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC vs. Edison Cobalt Corp
Performance |
| Timeline |
| Glencore PLC |
| Edison Cobalt Corp |
Glencore PLC and Edison Cobalt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Edison Cobalt
The main advantage of trading using opposite Glencore PLC and Edison Cobalt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Edison Cobalt 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 Edison Cobalt will offset losses from the drop in Edison Cobalt's 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 |
| Edison Cobalt vs. Rockridge Resources | Edison Cobalt vs. Ameriwest Lithium | Edison Cobalt vs. Osisko Metals Incorporated | Edison Cobalt vs. Volt Lithium Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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