Correlation Between Alphamin Resources and Glencore PLC

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Can any of the company-specific risk be diversified away by investing in both Alphamin 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 Alphamin 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 Alphamin Resources Corp and Glencore PLC, you can compare the effects of market volatilities on Alphamin 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 Alphamin Resources with a short position of Glencore PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphamin Resources and Glencore PLC.

Diversification Opportunities for Alphamin Resources and Glencore PLC

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Alphamin and Glencore is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alphamin Resources Corp and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC and Alphamin 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 Alphamin Resources Corp 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 Alphamin Resources i.e., Alphamin Resources and Glencore PLC go up and down completely randomly.

Pair Corralation between Alphamin Resources and Glencore PLC

Assuming the 90 days horizon Alphamin Resources is expected to generate 6.59 times less return on investment than Glencore PLC. In addition to that, Alphamin Resources is 1.83 times more volatile than Glencore PLC. It trades about 0.04 of its total potential returns per unit of risk. Glencore PLC is currently generating about 0.43 per unit of volatility. If you would invest  474.00  in Glencore PLC on December 29, 2023 and sell it today you would earn a total of  76.00  from holding Glencore PLC or generate 16.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Alphamin Resources Corp  vs.  Glencore PLC

 Performance 
       Timeline  
Alphamin Resources Corp 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Alphamin Resources Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal forward-looking indicators, Alphamin Resources may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Glencore PLC 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Glencore PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Alphamin Resources and Glencore PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alphamin Resources and Glencore PLC

The main advantage of trading using opposite Alphamin Resources and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphamin 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.
The idea behind Alphamin Resources Corp and Glencore PLC 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.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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