Correlation Between Compaa Minera and Glencore Plc

Can any of the company-specific risk be diversified away by investing in both Compaa Minera 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 Compaa Minera and Glencore Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compaa Minera Autln and Glencore plc, you can compare the effects of market volatilities on Compaa Minera 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 Compaa Minera with a short position of Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compaa Minera and Glencore Plc.

Diversification Opportunities for Compaa Minera and Glencore Plc

-0.31

Correlation Coefficient

Compaa Minera  Glencore Plc

Very good diversification

The 3 months correlation between Compaa and Glencore is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Compaa Minera Autln and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore plc and Compaa Minera 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 Compaa Minera Autln 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 Compaa Minera i.e., Compaa Minera and Glencore Plc go up and down completely randomly.

Pair Corralation between Compaa Minera and Glencore Plc

Assuming the 90 days trading horizon Compaa Minera Autln is expected to generate 1.99 times more return on investment than Glencore Plc. However, Compaa Minera is 1.99 times more volatile than Glencore plc. It trades about 0.11 of its potential returns per unit of risk. Glencore plc is currently generating about -0.11 per unit of risk. If you would invest  583.00  in Compaa Minera Autln on April 20, 2025 and sell it today you would earn a total of  124.00  from holding Compaa Minera Autln or generate 21.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compaa Minera Autln  vs.  Glencore plc

Compaa Minera Autln

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compaa Minera Autln are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Compaa Minera sustained solid returns over the last few months and may actually be approaching a breakup point.

Glencore plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glencore plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Compaa Minera and Glencore Plc

The main advantage of trading using opposite Compaa Minera and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compaa Minera 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 Compaa Minera Autln 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.