Correlation Between Glencore PLC and Grupo México
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Grupo México 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 Grupo México 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 Grupo Mxico SAB, you can compare the effects of market volatilities on Glencore PLC and Grupo México 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 Grupo México. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Grupo México.
Diversification Opportunities for Glencore PLC and Grupo México
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glencore and Grupo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Grupo Mxico SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Mxico SAB 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 Grupo México. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Mxico SAB has no effect on the direction of Glencore PLC i.e., Glencore PLC and Grupo México go up and down completely randomly.
Pair Corralation between Glencore PLC and Grupo México
Assuming the 90 days horizon Glencore PLC ADR is expected to generate 1.32 times more return on investment than Grupo México. However, Glencore PLC is 1.32 times more volatile than Grupo Mxico SAB. It trades about -0.14 of its potential returns per unit of risk. Grupo Mxico SAB is currently generating about -0.27 per unit of risk. If you would invest 1,051 in Glencore PLC ADR on August 30, 2024 and sell it today you would lose (77.00) from holding Glencore PLC ADR or give up 7.33% 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. Grupo Mxico SAB
Performance |
| Timeline |
| Glencore PLC ADR |
| Grupo Mxico SAB |
Glencore PLC and Grupo México Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Grupo México
The main advantage of trading using opposite Glencore PLC and Grupo México positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Grupo México 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 Grupo México will offset losses from the drop in Grupo México's long position.| Glencore PLC vs. Rockridge Resources | Glencore PLC vs. Ameriwest Lithium | Glencore PLC vs. Osisko Metals Incorporated | Glencore PLC vs. Volt Lithium Corp |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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