Correlation Between Skeena Resources and Glencore PLC
Can any of the company-specific risk be diversified away by investing in both Skeena 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 Skeena 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 Skeena Resources and Glencore PLC ADR, you can compare the effects of market volatilities on Skeena 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 Skeena Resources with a short position of Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skeena Resources and Glencore PLC.
Diversification Opportunities for Skeena Resources and Glencore PLC
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Skeena and Glencore is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Skeena Resources 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 Skeena 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 Skeena Resources 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 Skeena Resources i.e., Skeena Resources and Glencore PLC go up and down completely randomly.
Pair Corralation between Skeena Resources and Glencore PLC
Considering the 90-day investment horizon Skeena Resources is expected to generate 1.85 times more return on investment than Glencore PLC. However, Skeena Resources is 1.85 times more volatile than Glencore PLC ADR. It trades about -0.06 of its potential returns per unit of risk. Glencore PLC ADR is currently generating about -0.15 per unit of risk. If you would invest 997.00 in Skeena Resources on August 26, 2024 and sell it today you would lose (63.00) from holding Skeena Resources or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skeena Resources vs. Glencore PLC ADR
Performance |
| Timeline |
| Skeena Resources |
| Glencore PLC ADR |
Skeena Resources and Glencore PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skeena Resources and Glencore PLC
The main advantage of trading using opposite Skeena Resources and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skeena 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.| Skeena Resources vs. Materion | Skeena Resources vs. Compass Minerals International | Skeena Resources vs. IperionX Limited American | Skeena Resources vs. EMX Royalty Corp |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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