Correlation Between Glencore PLC and Ecora Resources
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Ecora Resources 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 Ecora Resources 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 Ecora Resources PLC, you can compare the effects of market volatilities on Glencore PLC and Ecora Resources 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 Ecora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Ecora Resources.
Diversification Opportunities for Glencore PLC and Ecora Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Ecora is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Ecora Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecora Resources PLC 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 Ecora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecora Resources PLC has no effect on the direction of Glencore PLC i.e., Glencore PLC and Ecora Resources go up and down completely randomly.
Pair Corralation between Glencore PLC and Ecora Resources
Assuming the 90 days horizon Glencore PLC ADR is expected to generate 0.57 times more return on investment than Ecora Resources. However, Glencore PLC ADR is 1.75 times less risky than Ecora Resources. It trades about -0.01 of its potential returns per unit of risk. Ecora Resources PLC is currently generating about -0.02 per unit of risk. If you would invest 1,180 in Glencore PLC ADR on September 3, 2024 and sell it today you would lose (219.00) from holding Glencore PLC ADR or give up 18.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC ADR vs. Ecora Resources PLC
Performance |
| Timeline |
| Glencore PLC ADR |
| Ecora Resources PLC |
Glencore PLC and Ecora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Ecora Resources
The main advantage of trading using opposite Glencore PLC and Ecora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Ecora Resources 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 Ecora Resources will offset losses from the drop in Ecora Resources' 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 |
| Ecora Resources vs. Qubec Nickel Corp | Ecora Resources vs. IGO Limited | Ecora Resources vs. Avarone Metals | Ecora Resources vs. Adriatic Metals PLC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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