Correlation Between Vale SA and Glencore Plc
Can any of the company-specific risk be diversified away by investing in both Vale SA 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 Vale SA and Glencore Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vale SA and Glencore plc, you can compare the effects of market volatilities on Vale SA 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 Vale SA with a short position of Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vale SA and Glencore Plc.
Diversification Opportunities for Vale SA and Glencore Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vale and Glencore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore plc and Vale SA 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 Vale SA 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 Vale SA i.e., Vale SA and Glencore Plc go up and down completely randomly.
Pair Corralation between Vale SA and Glencore Plc
If you would invest 18,425 in Vale SA on November 2, 2024 and sell it today you would earn a total of 675.00 from holding Vale SA or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vale SA vs. Glencore plc
Performance |
| Timeline |
| Vale SA |
| Glencore plc |
Vale SA and Glencore Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vale SA and Glencore Plc
The main advantage of trading using opposite Vale SA and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA 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.| Vale SA vs. Micron Technology | Vale SA vs. FIBRA Storage | Vale SA vs. First Republic Bank | Vale SA vs. Cognizant Technology Solutions |
| Glencore Plc vs. BHP Group | Glencore Plc vs. Rio Tinto Group | Glencore Plc vs. Vale SA | Glencore Plc vs. Cleveland Cliffs |
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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