Correlation Between Glencore PLC and Copper 360
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Copper 360 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 Copper 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC and Copper 360, you can compare the effects of market volatilities on Glencore PLC and Copper 360 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 Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Copper 360.
Diversification Opportunities for Glencore PLC and Copper 360
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Glencore and Copper is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 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 Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of Glencore PLC i.e., Glencore PLC and Copper 360 go up and down completely randomly.
Pair Corralation between Glencore PLC and Copper 360
Assuming the 90 days trading horizon Glencore PLC is expected to under-perform the Copper 360. But the stock apears to be less risky and, when comparing its historical volatility, Glencore PLC is 1.27 times less risky than Copper 360. The stock trades about -0.24 of its potential returns per unit of risk. The Copper 360 is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 32,200 in Copper 360 on August 31, 2024 and sell it today you would lose (3,000) from holding Copper 360 or give up 9.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC vs. Copper 360
Performance |
| Timeline |
| Glencore PLC |
| Copper 360 |
Glencore PLC and Copper 360 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Copper 360
The main advantage of trading using opposite Glencore PLC and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Copper 360 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 Copper 360 will offset losses from the drop in Copper 360's long position.| Glencore PLC vs. Safari Investments RSA | Glencore PLC vs. HomeChoice Investments | Glencore PLC vs. Standard Bank Group | Glencore PLC vs. Deneb Investments |
| Copper 360 vs. HomeChoice Investments | Copper 360 vs. Trematon Capital Investments | Copper 360 vs. We Buy Cars | Copper 360 vs. Deneb Investments |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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