Correlation Between Er Therapeutics and Glencore PLC

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

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

Diversification Opportunities for Er Therapeutics and Glencore PLC

0.0

Correlation Coefficient

Er Therapeutics  Glencore PLC

Pay attention - limited upside

The 3 months correlation between PNGM and Glencore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Er Therapeutics and Glencore PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore PLC ADR and Er Therapeutics 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 Er Therapeutics 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 ADR has no effect on the direction of Er Therapeutics i.e., Er Therapeutics and Glencore PLC go up and down completely randomly.

Pair Corralation between Er Therapeutics and Glencore PLC

If you would invest  0.01  in Er Therapeutics on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Er Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Er Therapeutics  vs.  Glencore PLC ADR

Er Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Er Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Er Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Glencore PLC ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glencore PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Er Therapeutics and Glencore PLC

The main advantage of trading using opposite Er Therapeutics and Glencore PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Er Therapeutics 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 Er Therapeutics and Glencore PLC ADR 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.