Correlation Between Glencore PLC and NGEx Minerals
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and NGEx Minerals 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 NGEx Minerals 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 NGEx Minerals, you can compare the effects of market volatilities on Glencore PLC and NGEx Minerals 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 NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and NGEx Minerals.
Diversification Opportunities for Glencore PLC and NGEx Minerals
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glencore and NGEx is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals 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 NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of Glencore PLC i.e., Glencore PLC and NGEx Minerals go up and down completely randomly.
Pair Corralation between Glencore PLC and NGEx Minerals
Assuming the 90 days horizon Glencore PLC ADR is expected to under-perform the NGEx Minerals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC ADR is 1.07 times less risky than NGEx Minerals. The pink sheet trades about -0.19 of its potential returns per unit of risk. The NGEx Minerals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 902.00 in NGEx Minerals on December 2, 2024 and sell it today you would earn a total of 57.00 from holding NGEx Minerals or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC ADR vs. NGEx Minerals
Performance |
| Timeline |
| Glencore PLC ADR |
| NGEx Minerals |
Glencore PLC and NGEx Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and NGEx Minerals
The main advantage of trading using opposite Glencore PLC and NGEx Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, NGEx Minerals 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 NGEx Minerals will offset losses from the drop in NGEx Minerals' long position.| Glencore PLC vs. Anglo American PLC | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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