Correlation Between Glencore Plc and Fluor
Can any of the company-specific risk be diversified away by investing in both Glencore Plc and Fluor 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 Fluor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore plc and Fluor, you can compare the effects of market volatilities on Glencore Plc and Fluor 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 Fluor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore Plc and Fluor.
Diversification Opportunities for Glencore Plc and Fluor
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glencore and Fluor is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Glencore plc and Fluor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluor 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 Fluor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluor has no effect on the direction of Glencore Plc i.e., Glencore Plc and Fluor go up and down completely randomly.
Pair Corralation between Glencore Plc and Fluor
Assuming the 90 days trading horizon Glencore Plc is expected to generate 18.44 times less return on investment than Fluor. But when comparing it to its historical volatility, Glencore plc is 25.07 times less risky than Fluor. It trades about 0.1 of its potential returns per unit of risk. Fluor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 65,599 in Fluor on August 29, 2024 and sell it today you would earn a total of 32,928 from holding Fluor or generate 50.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore plc vs. Fluor
Performance |
| Timeline |
| Glencore plc |
| Fluor |
Glencore Plc and Fluor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore Plc and Fluor
The main advantage of trading using opposite Glencore Plc and Fluor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore Plc position performs unexpectedly, Fluor 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 Fluor will offset losses from the drop in Fluor's long position.| Glencore Plc vs. First Republic Bank | Glencore Plc vs. Micron Technology | Glencore Plc vs. Taiwan Semiconductor Manufacturing | Glencore Plc vs. Verizon Communications |
| Fluor vs. GMxico Transportes SAB | Fluor vs. Monster Beverage Corp | Fluor vs. DXC Technology | Fluor vs. Grupo Sports World |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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