Correlation Between Glencore International and APPTECH CORP

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Can any of the company-specific risk be diversified away by investing in both Glencore International and APPTECH CORP 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 International and APPTECH CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glencore International Plc and APPTECH CORP, you can compare the effects of market volatilities on Glencore International and APPTECH CORP 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 International with a short position of APPTECH CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore International and APPTECH CORP.

Diversification Opportunities for Glencore International and APPTECH CORP

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Glencore and APPTECH is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Glencore International Plc and APPTECH CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPTECH CORP and Glencore International 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 International Plc are associated (or correlated) with APPTECH CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPTECH CORP has no effect on the direction of Glencore International i.e., Glencore International and APPTECH CORP go up and down completely randomly.

Pair Corralation between Glencore International and APPTECH CORP

Assuming the 90 days horizon Glencore International is expected to generate 86.91 times less return on investment than APPTECH CORP. But when comparing it to its historical volatility, Glencore International Plc is 51.66 times less risky than APPTECH CORP. It trades about 0.08 of its potential returns per unit of risk. APPTECH CORP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  855.00  in APPTECH CORP on September 1, 2022 and sell it today you would lose (777.00)  from holding APPTECH CORP or give up 90.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Glencore International Plc  vs.  APPTECH CORP

 Performance (%) 
       Timeline  
Glencore International 
Glencore Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Glencore International Plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Glencore International showed solid returns over the last few months and may actually be approaching a breakup point.

Glencore Price Channel

APPTECH CORP 
APPTECH Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in APPTECH CORP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, APPTECH CORP showed solid returns over the last few months and may actually be approaching a breakup point.

APPTECH Price Channel

Glencore International and APPTECH CORP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Glencore International and APPTECH CORP

The main advantage of trading using opposite Glencore International and APPTECH CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore International position performs unexpectedly, APPTECH CORP 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 APPTECH CORP will offset losses from the drop in APPTECH CORP's long position.
Glencore International vs. Netflix
The idea behind Glencore International Plc and APPTECH CORP 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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Check out your portfolio center. 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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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