Correlation Between Glencore PLC and Atalaya Mining

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

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

Diversification Opportunities for Glencore PLC and Atalaya Mining

0.87

Correlation Coefficient

Glencore PLC  Atalaya Mining

Very poor diversification

The 3 months correlation between Glencore and Atalaya is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Glencore PLC and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining and Glencore PLC 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 Glencore PLC are associated (or correlated) with Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Glencore PLC i.e., Glencore PLC and Atalaya Mining go up and down completely randomly.

Pair Corralation between Glencore PLC and Atalaya Mining

Assuming the 90 days trading horizon Glencore PLC is expected to under-perform the Atalaya Mining. But the stock apears to be less risky and, when comparing its historical volatility, Glencore PLC is 1.28 times less risky than Atalaya Mining. The stock trades about -0.28 of its potential returns per unit of risk. The Atalaya Mining is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  35,500  in Atalaya Mining on September 25, 2024 and sell it today you would lose (1,000.00) from holding Atalaya Mining or give up 2.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Glencore PLC  vs.  Atalaya Mining

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Atalaya Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atalaya Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Glencore PLC and Atalaya Mining

The main advantage of trading using opposite Glencore PLC and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore PLC position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.

The idea behind Glencore PLC and Atalaya Mining 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.