Correlation Between Glencore PLC and Stria Lithium
Can any of the company-specific risk be diversified away by investing in both Glencore PLC and Stria Lithium 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 Stria Lithium 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 Stria Lithium, you can compare the effects of market volatilities on Glencore PLC and Stria Lithium 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 Stria Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore PLC and Stria Lithium.
Diversification Opportunities for Glencore PLC and Stria Lithium
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glencore and Stria is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC ADR and Stria Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stria Lithium 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 Stria Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stria Lithium has no effect on the direction of Glencore PLC i.e., Glencore PLC and Stria Lithium go up and down completely randomly.
Pair Corralation between Glencore PLC and Stria Lithium
Assuming the 90 days horizon Glencore PLC ADR is expected to under-perform the Stria Lithium. But the pink sheet apears to be less risky and, when comparing its historical volatility, Glencore PLC ADR is 2.68 times less risky than Stria Lithium. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Stria Lithium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Stria Lithium on August 29, 2024 and sell it today you would lose (0.06) from holding Stria Lithium or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glencore PLC ADR vs. Stria Lithium
Performance |
| Timeline |
| Glencore PLC ADR |
| Stria Lithium |
Glencore PLC and Stria Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glencore PLC and Stria Lithium
The main advantage of trading using opposite Glencore PLC and Stria Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Stria Lithium 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 Stria Lithium will offset losses from the drop in Stria Lithium's long position.The idea behind Glencore PLC ADR and Stria Lithium pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Stria Lithium vs. Premium Nickel Resources | Stria Lithium vs. Juggernaut Exploration | Stria Lithium vs. Intrepid Metals Corp | Stria Lithium vs. Group Ten Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |