Correlation Between Glencore Plc and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both Glencore Plc and Genworth Financial 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 Genworth Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore plc and Genworth Financial, you can compare the effects of market volatilities on Glencore Plc and Genworth Financial 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 Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore Plc and Genworth Financial.
Diversification Opportunities for Glencore Plc and Genworth Financial
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Glencore and Genworth is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Glencore plc and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial 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 Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of Glencore Plc i.e., Glencore Plc and Genworth Financial go up and down completely randomly.
Pair Corralation between Glencore Plc and Genworth Financial
Assuming the 90 days trading horizon Glencore plc is expected to under-perform the Genworth Financial. In addition to that, Glencore Plc is 1.33 times more volatile than Genworth Financial. It trades about -0.03 of its total potential returns per unit of risk. Genworth Financial is currently generating about 0.01 per unit of volatility. If you would invest 9,988 in Genworth Financial on November 2, 2024 and sell it today you would earn a total of 192.00 from holding Genworth Financial or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore plc vs. Genworth Financial
Performance |
| Timeline |
| Glencore plc |
| Genworth Financial |
Glencore Plc and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore Plc and Genworth Financial
The main advantage of trading using opposite Glencore Plc and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore Plc position performs unexpectedly, Genworth Financial 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 Genworth Financial will offset losses from the drop in Genworth Financial's long position.| Glencore Plc vs. First Republic Bank | Glencore Plc vs. Verizon Communications | Glencore Plc vs. DXC Technology | Glencore Plc vs. Lloyds Banking Group |
| Genworth Financial vs. Pea Verde SAB | Genworth Financial vs. Microsoft | Genworth Financial vs. The Select Sector | Genworth Financial vs. Promotora y Operadora |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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