Correlation Between Glencore PLC and Québec Nickel
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Québec Nickel 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 Québec Nickel 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 Qubec Nickel Corp, you can compare the effects of market volatilities on Glencore PLC and Québec Nickel 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 Québec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Québec Nickel.
Diversification Opportunities for Glencore PLC and Québec Nickel
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Glencore and Québec is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel 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 Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Glencore PLC i.e., Glencore PLC and Québec Nickel go up and down completely randomly.
Pair Corralation between Glencore PLC and Québec Nickel
Assuming the 90 days horizon Glencore PLC is expected to generate 37.49 times less return on investment than Québec Nickel. But when comparing it to its historical volatility, Glencore PLC ADR is 8.23 times less risky than Québec Nickel. It trades about 0.0 of its potential returns per unit of risk. Qubec Nickel Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Qubec Nickel Corp on August 26, 2024 and sell it today you would lose (47.25) from holding Qubec Nickel Corp or give up 96.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC ADR vs. Qubec Nickel Corp
Performance |
| Timeline |
| Glencore PLC ADR |
| Qubec Nickel Corp |
Glencore PLC and Québec Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Québec Nickel
The main advantage of trading using opposite Glencore PLC and Québec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Québec Nickel 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 Québec Nickel will offset losses from the drop in Québec Nickel'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 |
| Québec Nickel vs. Norra Metals Corp | Québec Nickel vs. E79 Resources Corp | Québec Nickel vs. Voltage Metals Corp | Québec Nickel vs. Cantex Mine Development |
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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