Correlation Between Glencore PLC and Boliden AB
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Boliden AB 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 Boliden AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore PLC ADR and Boliden AB ADR, you can compare the effects of market volatilities on Glencore PLC and Boliden AB 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 Boliden AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Boliden AB.
Diversification Opportunities for Glencore PLC and Boliden AB
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Boliden is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Boliden AB ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boliden AB ADR 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 ADR are associated (or correlated) with Boliden AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boliden AB ADR has no effect on the direction of Glencore PLC i.e., Glencore PLC and Boliden AB go up and down completely randomly.
Pair Corralation between Glencore PLC and Boliden AB
Assuming the 90 days horizon Glencore PLC is expected to generate 2.77 times less return on investment than Boliden AB. In addition to that, Glencore PLC is 1.06 times more volatile than Boliden AB ADR. It trades about 0.14 of its total potential returns per unit of risk. Boliden AB ADR is currently generating about 0.43 per unit of volatility. If you would invest 5,618 in Boliden AB ADR on October 26, 2024 and sell it today you would earn a total of 577.00 from holding Boliden AB ADR or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC ADR vs. Boliden AB ADR
Performance |
| Timeline |
| Glencore PLC ADR |
| Boliden AB ADR |
Glencore PLC and Boliden AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Boliden AB
The main advantage of trading using opposite Glencore PLC and Boliden AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Boliden AB 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 Boliden AB will offset losses from the drop in Boliden AB's long position.| Glencore PLC vs. Anglo American PLC | Glencore PLC vs. Sumitomo Metal Mining | Glencore PLC vs. Rio Tinto Group | Glencore PLC vs. Ivanhoe Mines |
| Boliden AB vs. Sumitomo Metal Mining | Boliden AB vs. Anglo American PLC | Boliden AB vs. Glencore PLC | Boliden AB vs. Snow Lake Resources |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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