Correlation Between Glencore PLC and GEO JS
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and GEO JS 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 GEO JS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and GEO JS Tech, you can compare the effects of market volatilities on Glencore PLC and GEO JS 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 GEO JS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and GEO JS.
Diversification Opportunities for Glencore PLC and GEO JS
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Glencore and GEO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and GEO JS Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEO JS Tech 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 GEO JS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEO JS Tech has no effect on the direction of Glencore PLC i.e., Glencore PLC and GEO JS go up and down completely randomly.
Pair Corralation between Glencore PLC and GEO JS
Assuming the 90 days horizon Glencore PLC is expected to under-perform the GEO JS. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC is 5.54 times less risky than GEO JS. The pink sheet trades about -0.01 of its potential returns per unit of risk. The GEO JS Tech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.50 in GEO JS Tech on September 14, 2024 and sell it today you would lose (1.20) from holding GEO JS Tech or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Glencore PLC vs. GEO JS Tech
Performance |
| Timeline |
| Glencore PLC |
| GEO JS Tech |
Glencore PLC and GEO JS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and GEO JS
The main advantage of trading using opposite Glencore PLC and GEO JS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, GEO JS 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 GEO JS will offset losses from the drop in GEO JS's long position.| Glencore PLC vs. Qubec Nickel Corp | Glencore PLC vs. IGO Limited | Glencore PLC vs. Focus Graphite | Glencore PLC vs. Mineral Res |
| GEO JS vs. Garibaldi Resources Corp | GEO JS vs. Northern Dynasty Minerals | GEO JS vs. Asia Broadband | GEO JS vs. Avarone Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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