Correlation Between Glencore PLC and Silver Dollar
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Silver Dollar 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 Dollar 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 Dollar Resources, you can compare the effects of market volatilities on Glencore PLC and Silver Dollar 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 Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Silver Dollar.
Diversification Opportunities for Glencore PLC and Silver Dollar
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Glencore and Silver is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Silver Dollar Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Dollar Resources 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 Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Dollar Resources has no effect on the direction of Glencore PLC i.e., Glencore PLC and Silver Dollar go up and down completely randomly.
Pair Corralation between Glencore PLC and Silver Dollar
Assuming the 90 days horizon Glencore PLC is expected to generate 0.57 times more return on investment than Silver Dollar. However, Glencore PLC is 1.77 times less risky than Silver Dollar. It trades about -0.16 of its potential returns per unit of risk. Silver Dollar Resources is currently generating about -0.3 per unit of risk. If you would invest 525.00 in Glencore PLC on September 1, 2024 and sell it today you would lose (42.00) from holding Glencore PLC or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Glencore PLC vs. Silver Dollar Resources
Performance |
| Timeline |
| Glencore PLC |
| Silver Dollar Resources |
Glencore PLC and Silver Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Silver Dollar
The main advantage of trading using opposite Glencore PLC and Silver Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Silver Dollar 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 Dollar will offset losses from the drop in Silver Dollar'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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