Correlation Between Glencore PLC and Silver Elephant
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Silver Elephant 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 Silver Elephant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Silver Elephant Mining, you can compare the effects of market volatilities on Glencore PLC and Silver Elephant 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 Silver Elephant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Silver Elephant.
Diversification Opportunities for Glencore PLC and Silver Elephant
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Silver is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining 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 Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of Glencore PLC i.e., Glencore PLC and Silver Elephant go up and down completely randomly.
Pair Corralation between Glencore PLC and Silver Elephant
Assuming the 90 days horizon Glencore PLC is expected to under-perform the Silver Elephant. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC is 4.6 times less risky than Silver Elephant. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Silver Elephant Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Silver Elephant Mining on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Silver Elephant Mining or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC vs. Silver Elephant Mining
Performance |
| Timeline |
| Glencore PLC |
| Silver Elephant Mining |
Glencore PLC and Silver Elephant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Silver Elephant
The main advantage of trading using opposite Glencore PLC and Silver Elephant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Silver Elephant 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 Silver Elephant will offset losses from the drop in Silver Elephant'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 |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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