Correlation Between Amaroq Minerals and Glencore PLC

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

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

Diversification Opportunities for Amaroq Minerals and Glencore PLC

-0.4

Correlation Coefficient

Amaroq Minerals  Glencore PLC

Very good diversification

The 3 months correlation between Amaroq and Glencore is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amaroq Minerals and Glencore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC and Amaroq Minerals 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 Amaroq Minerals 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 Amaroq Minerals i.e., Amaroq Minerals and Glencore PLC go up and down completely randomly.

Pair Corralation between Amaroq Minerals and Glencore PLC

Assuming the 90 days trading horizon Amaroq Minerals is expected to generate 1.58 times more return on investment than Glencore PLC. However, Amaroq Minerals is 1.58 times more volatile than Glencore PLC. It trades about 0.42 of its potential returns per unit of risk. Glencore PLC is currently generating about -0.15 per unit of risk. If you would invest  8,000  in Amaroq Minerals on September 19, 2024 and sell it today you would earn a total of  2,100  from holding Amaroq Minerals or generate 26.25% return on investment over 90 days.

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

Amaroq Minerals  vs.  Glencore PLC

Amaroq Minerals

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amaroq Minerals are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Amaroq Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Glencore PLC

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Glencore PLC is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amaroq Minerals and Glencore PLC

The main advantage of trading using opposite Amaroq Minerals and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amaroq Minerals 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 Amaroq Minerals 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.