Correlation Between Glencore PLC and Class 1
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Class 1 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 Class 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Class 1 Nickel, you can compare the effects of market volatilities on Glencore PLC and Class 1 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 Class 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Class 1.
Diversification Opportunities for Glencore PLC and Class 1
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Glencore and Class is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Class 1 Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Class 1 Nickel 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 Class 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Class 1 Nickel has no effect on the direction of Glencore PLC i.e., Glencore PLC and Class 1 go up and down completely randomly.
Pair Corralation between Glencore PLC and Class 1
Assuming the 90 days horizon Glencore PLC is expected to under-perform the Class 1. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC is 8.93 times less risky than Class 1. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Class 1 Nickel is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9.40 in Class 1 Nickel on September 3, 2024 and sell it today you would earn a total of 8.60 from holding Class 1 Nickel or generate 91.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 79.69% |
| Values | Daily Returns |
Glencore PLC vs. Class 1 Nickel
Performance |
| Timeline |
| Glencore PLC |
| Class 1 Nickel |
Glencore PLC and Class 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Class 1
The main advantage of trading using opposite Glencore PLC and Class 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Class 1 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 Class 1 will offset losses from the drop in Class 1'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 |
| Class 1 vs. Green Battery Minerals | Class 1 vs. Pampa Metals | Class 1 vs. EcoGraf Limited | Class 1 vs. Mundoro Capital |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |