Correlation Between Glencore International and Atlas Salt

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Can any of the company-specific risk be diversified away by investing in both Glencore International and Atlas Salt 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 Atlas Salt 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 Atlas Salt, you can compare the effects of market volatilities on Glencore International and Atlas Salt 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 Atlas Salt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glencore International and Atlas Salt.

Diversification Opportunities for Glencore International and Atlas Salt

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Glencore and Atlas is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Glencore International Plc and Atlas Salt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Salt 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 Atlas Salt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Salt has no effect on the direction of Glencore International i.e., Glencore International and Atlas Salt go up and down completely randomly.

Pair Corralation between Glencore International and Atlas Salt

Assuming the 90 days horizon Glencore International Plc is expected to generate 0.32 times more return on investment than Atlas Salt. However, Glencore International Plc is 3.08 times less risky than Atlas Salt. It trades about -0.06 of its potential returns per unit of risk. Atlas Salt is currently generating about -0.22 per unit of risk. If you would invest  1,106  in Glencore International Plc on July 5, 2022 and sell it today you would lose (58.00)  from holding Glencore International Plc or give up 5.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Glencore International Plc  vs.  Atlas Salt

 Performance (%) 
       Timeline  
Glencore International 
Glencore Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Glencore International Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, Glencore International may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Glencore Price Channel

Atlas Salt 
Atlas Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Salt are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Atlas Salt may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Atlas Price Channel

Glencore International and Atlas Salt Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Glencore International and Atlas Salt

The main advantage of trading using opposite Glencore International and Atlas Salt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glencore International position performs unexpectedly, Atlas Salt 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 Atlas Salt will offset losses from the drop in Atlas Salt's long position.
Glencore International vs. Amazon Inc
The idea behind Glencore International Plc and Atlas Salt 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.
Atlas Salt vs. Amazon Inc
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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