Correlation Between PRECISION DRILLING and Glencore Plc
Can any of the company-specific risk be diversified away by investing in both PRECISION DRILLING 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 PRECISION DRILLING and Glencore Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PRECISION DRILLING P and Glencore plc, you can compare the effects of market volatilities on PRECISION DRILLING 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 PRECISION DRILLING with a short position of Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRECISION DRILLING and Glencore Plc.
Diversification Opportunities for PRECISION DRILLING and Glencore Plc
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PRECISION and Glencore is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PRECISION DRILLING P and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore plc and PRECISION DRILLING 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 PRECISION DRILLING P 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 has no effect on the direction of PRECISION DRILLING i.e., PRECISION DRILLING and Glencore Plc go up and down completely randomly.
Pair Corralation between PRECISION DRILLING and Glencore Plc
Assuming the 90 days trading horizon PRECISION DRILLING P is expected to under-perform the Glencore Plc. But the stock apears to be less risky and, when comparing its historical volatility, PRECISION DRILLING P is 1.18 times less risky than Glencore Plc. The stock trades about -0.11 of its potential returns per unit of risk. The Glencore plc is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Glencore plc on November 4, 2024 and sell it today you would lose (25.00) from holding Glencore plc or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PRECISION DRILLING P vs. Glencore plc
Performance |
| Timeline |
| PRECISION DRILLING |
| Glencore plc |
PRECISION DRILLING and Glencore Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PRECISION DRILLING and Glencore Plc
The main advantage of trading using opposite PRECISION DRILLING and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PRECISION DRILLING 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.| PRECISION DRILLING vs. CITY OFFICE REIT | PRECISION DRILLING vs. Television Broadcasts Limited | PRECISION DRILLING vs. NAGOYA RAILROAD | PRECISION DRILLING vs. CAIRN HOMES EO |
| Glencore Plc vs. Renesas Electronics | Glencore Plc vs. LPKF Laser Electronics | Glencore Plc vs. Methode Electronics | Glencore Plc vs. Nucletron Electronic Aktiengesellschaft |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |