Correlation Between Glencore PLC and Global Atomic
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Global Atomic 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 Global Atomic 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 Global Atomic Corp, you can compare the effects of market volatilities on Glencore PLC and Global Atomic 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 Global Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Global Atomic.
Diversification Opportunities for Glencore PLC and Global Atomic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Glencore and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Global Atomic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Atomic Corp 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 Global Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Atomic Corp has no effect on the direction of Glencore PLC i.e., Glencore PLC and Global Atomic go up and down completely randomly.
Pair Corralation between Glencore PLC and Global Atomic
Assuming the 90 days horizon Glencore PLC ADR is expected to generate 0.37 times more return on investment than Global Atomic. However, Glencore PLC ADR is 2.73 times less risky than Global Atomic. It trades about -0.02 of its potential returns per unit of risk. Global Atomic Corp is currently generating about -0.05 per unit of risk. If you would invest 1,089 in Glencore PLC ADR on October 21, 2024 and sell it today you would lose (171.00) from holding Glencore PLC ADR or give up 15.7% 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. Global Atomic Corp
Performance |
| Timeline |
| Glencore PLC ADR |
| Global Atomic Corp |
Glencore PLC and Global Atomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Global Atomic
The main advantage of trading using opposite Glencore PLC and Global Atomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Global Atomic 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 Global Atomic will offset losses from the drop in Global Atomic'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 |
| Global Atomic vs. NGEx Minerals | Global Atomic vs. Boss Resources | Global Atomic vs. Forum Energy Metals | Global Atomic vs. Kraken Energy Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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