Correlation Between Ivanhoe Mines and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and Teck Resources 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 Ivanhoe Mines and Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and Teck Resources Limited, you can compare the effects of market volatilities on Ivanhoe Mines and Teck Resources 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 Ivanhoe Mines with a short position of Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Teck Resources.
Diversification Opportunities for Ivanhoe Mines and Teck Resources
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Teck is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and Ivanhoe Mines 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 Ivanhoe Mines are associated (or correlated) with Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Teck Resources go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and Teck Resources
Assuming the 90 days trading horizon Ivanhoe Mines is expected to under-perform the Teck Resources. In addition to that, Ivanhoe Mines is 1.65 times more volatile than Teck Resources Limited. It trades about -0.16 of its total potential returns per unit of risk. Teck Resources Limited is currently generating about 0.03 per unit of volatility. If you would invest 5,892 in Teck Resources Limited on November 3, 2024 and sell it today you would earn a total of 45.00 from holding Teck Resources Limited or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Mines vs. Teck Resources Limited
Performance |
| Timeline |
| Ivanhoe Mines |
| Teck Resources |
Ivanhoe Mines and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and Teck Resources
The main advantage of trading using opposite Ivanhoe Mines and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| Ivanhoe Mines vs. Lundin Mining | Ivanhoe Mines vs. First Quantum Minerals | Ivanhoe Mines vs. HudBay Minerals | Ivanhoe Mines vs. Eldorado Gold Corp |
| Teck Resources vs. First Quantum Minerals | Teck Resources vs. Nutrien | Teck Resources vs. Lundin Mining | Teck Resources vs. Wheaton Precious Metals |
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 the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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