Correlation Between Liontown Resources and Glencore PLC
Can any of the company-specific risk be diversified away by investing in both Liontown Resources and Glencore PLC 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 Liontown Resources and Glencore PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liontown Resources Limited and Glencore PLC ADR, you can compare the effects of market volatilities on Liontown Resources and Glencore PLC 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 Liontown Resources with a short position of Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontown Resources and Glencore PLC.
Diversification Opportunities for Liontown Resources and Glencore PLC
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liontown and Glencore is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Liontown Resources Limited and Glencore PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC ADR and Liontown Resources 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 Liontown Resources Limited are associated (or correlated) with Glencore PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glencore PLC ADR has no effect on the direction of Liontown Resources i.e., Liontown Resources and Glencore PLC go up and down completely randomly.
Pair Corralation between Liontown Resources and Glencore PLC
Assuming the 90 days horizon Liontown Resources Limited is expected to generate 3.15 times more return on investment than Glencore PLC. However, Liontown Resources is 3.15 times more volatile than Glencore PLC ADR. It trades about 0.0 of its potential returns per unit of risk. Glencore PLC ADR is currently generating about -0.01 per unit of risk. If you would invest 132.00 in Liontown Resources Limited on August 26, 2024 and sell it today you would lose (83.00) from holding Liontown Resources Limited or give up 62.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontown Resources Limited vs. Glencore PLC ADR
Performance |
| Timeline |
| Liontown Resources |
| Glencore PLC ADR |
Liontown Resources and Glencore PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontown Resources and Glencore PLC
The main advantage of trading using opposite Liontown Resources and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontown Resources position performs unexpectedly, Glencore PLC 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 Glencore PLC will offset losses from the drop in Glencore PLC's long position.| Liontown Resources vs. Norra Metals Corp | Liontown Resources vs. ZincX Resources Corp | Liontown Resources vs. Nuinsco Resources Limited | Liontown Resources vs. South Star Battery |
| Glencore PLC vs. Anglo American PLC | Glencore PLC vs. Sumitomo Metal Mining | Glencore PLC vs. Rio Tinto Group | Glencore PLC vs. Ivanhoe Mines |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |