Correlation Between Glencore PLC and Callinex Mines
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Callinex Mines 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 Callinex Mines 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 Callinex Mines, you can compare the effects of market volatilities on Glencore PLC and Callinex Mines 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 Callinex Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Callinex Mines.
Diversification Opportunities for Glencore PLC and Callinex Mines
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glencore and Callinex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines 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 Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of Glencore PLC i.e., Glencore PLC and Callinex Mines go up and down completely randomly.
Pair Corralation between Glencore PLC and Callinex Mines
Assuming the 90 days horizon Glencore PLC ADR is expected to generate 0.67 times more return on investment than Callinex Mines. However, Glencore PLC ADR is 1.5 times less risky than Callinex Mines. It trades about -0.12 of its potential returns per unit of risk. Callinex Mines is currently generating about -0.21 per unit of risk. If you would invest 904.00 in Glencore PLC ADR on November 5, 2024 and sell it today you would lose (41.00) from holding Glencore PLC ADR or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC ADR vs. Callinex Mines
Performance |
| Timeline |
| Glencore PLC ADR |
| Callinex Mines |
Glencore PLC and Callinex Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Callinex Mines
The main advantage of trading using opposite Glencore PLC and Callinex Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Callinex Mines 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 Callinex Mines will offset losses from the drop in Callinex Mines' 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 |
| Callinex Mines vs. West Mining Corp | Callinex Mines vs. Flying Nickel Mining | Callinex Mines vs. Forum Energy Metals | Callinex Mines vs. Jourdan 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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