Correlation Between Glencore PLC and Keweenaw Land
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Keweenaw Land 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 Keweenaw Land 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 Keweenaw Land Association, you can compare the effects of market volatilities on Glencore PLC and Keweenaw Land 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 Keweenaw Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Keweenaw Land.
Diversification Opportunities for Glencore PLC and Keweenaw Land
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Glencore and Keweenaw is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Keweenaw Land Association in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keweenaw Land Association 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 Keweenaw Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keweenaw Land Association has no effect on the direction of Glencore PLC i.e., Glencore PLC and Keweenaw Land go up and down completely randomly.
Pair Corralation between Glencore PLC and Keweenaw Land
Assuming the 90 days horizon Glencore PLC ADR is expected to under-perform the Keweenaw Land. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC ADR is 2.03 times less risky than Keweenaw Land. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Keweenaw Land Association is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,799 in Keweenaw Land Association on August 29, 2024 and sell it today you would lose (299.00) from holding Keweenaw Land Association or give up 7.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Glencore PLC ADR vs. Keweenaw Land Association
Performance |
| Timeline |
| Glencore PLC ADR |
| Keweenaw Land Association |
Glencore PLC and Keweenaw Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Keweenaw Land
The main advantage of trading using opposite Glencore PLC and Keweenaw Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Keweenaw Land 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 Keweenaw Land will offset losses from the drop in Keweenaw Land'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 |
| Keweenaw Land vs. Anglo American plc | Keweenaw Land vs. Glencore PLC ADR | Keweenaw Land vs. Fortescue Metals Group | Keweenaw Land vs. South32 Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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