Correlation Between Glencore PLC and Patriot Battery
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Patriot Battery 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 Patriot Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Patriot Battery Metals, you can compare the effects of market volatilities on Glencore PLC and Patriot Battery 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 Patriot Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Patriot Battery.
Diversification Opportunities for Glencore PLC and Patriot Battery
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Patriot is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Patriot Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot Battery Metals 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 Patriot Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot Battery Metals has no effect on the direction of Glencore PLC i.e., Glencore PLC and Patriot Battery go up and down completely randomly.
Pair Corralation between Glencore PLC and Patriot Battery
Assuming the 90 days horizon Glencore PLC is expected to generate 0.65 times more return on investment than Patriot Battery. However, Glencore PLC is 1.54 times less risky than Patriot Battery. It trades about -0.18 of its potential returns per unit of risk. Patriot Battery Metals is currently generating about -0.56 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. Patriot Battery Metals
Performance |
| Timeline |
| Glencore PLC |
| Patriot Battery Metals |
Glencore PLC and Patriot Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Patriot Battery
The main advantage of trading using opposite Glencore PLC and Patriot Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Patriot Battery 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 Patriot Battery will offset losses from the drop in Patriot Battery'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 |
| Patriot Battery vs. Hannan Metals | Patriot Battery vs. Aldebaran Resources | Patriot Battery vs. Leading Edge Materials | Patriot Battery vs. Atco Mining |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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