Correlation Between Glencore PLC and Sassy Resources
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Sassy Resources 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 Sassy Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Sassy Resources, you can compare the effects of market volatilities on Glencore PLC and Sassy Resources 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 Sassy Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Sassy Resources.
Diversification Opportunities for Glencore PLC and Sassy Resources
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Sassy is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Sassy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sassy 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 Sassy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sassy Resources has no effect on the direction of Glencore PLC i.e., Glencore PLC and Sassy Resources go up and down completely randomly.
Pair Corralation between Glencore PLC and Sassy Resources
Assuming the 90 days horizon Glencore PLC is expected to under-perform the Sassy Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC is 9.29 times less risky than Sassy Resources. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Sassy Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Sassy Resources on October 25, 2024 and sell it today you would lose (48.50) from holding Sassy Resources or give up 88.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Glencore PLC vs. Sassy Resources
Performance |
| Timeline |
| Glencore PLC |
| Sassy Resources |
Glencore PLC and Sassy Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Sassy Resources
The main advantage of trading using opposite Glencore PLC and Sassy Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Sassy Resources 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 Sassy Resources will offset losses from the drop in Sassy Resources' 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 |
| Sassy Resources vs. Pan Global Resources | Sassy Resources vs. Tower Resources | Sassy Resources vs. Metals X Limited | Sassy Resources vs. Nevada King Gold |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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