Correlation Between Lithium Americas and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Lithium Americas 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 Lithium Americas and Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Americas Corp and Teck Resources Ltd, you can compare the effects of market volatilities on Lithium Americas 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 Lithium Americas with a short position of Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and Teck Resources.
Diversification Opportunities for Lithium Americas and Teck Resources
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lithium and Teck is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Teck Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and Lithium Americas 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 Lithium Americas Corp 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 Lithium Americas i.e., Lithium Americas and Teck Resources go up and down completely randomly.
Pair Corralation between Lithium Americas and Teck Resources
Considering the 90-day investment horizon Lithium Americas Corp is expected to under-perform the Teck Resources. In addition to that, Lithium Americas is 2.29 times more volatile than Teck Resources Ltd. It trades about -0.01 of its total potential returns per unit of risk. Teck Resources Ltd is currently generating about 0.06 per unit of volatility. If you would invest 3,615 in Teck Resources Ltd on August 24, 2024 and sell it today you would earn a total of 1,106 from holding Teck Resources Ltd or generate 30.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Americas Corp vs. Teck Resources Ltd
Performance |
| Timeline |
| Lithium Americas Corp |
| Teck Resources |
Lithium Americas and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Americas and Teck Resources
The main advantage of trading using opposite Lithium Americas and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Americas 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.| Lithium Americas vs. Qubec Nickel Corp | Lithium Americas vs. Cypress Development Corp | Lithium Americas vs. Lake Resources NL | Lithium Americas vs. Sayona Mining Limited |
| Teck Resources vs. Rio Tinto ADR | Teck Resources vs. Vale SA ADR | Teck Resources vs. MP Materials Corp | Teck Resources vs. Lithium Americas Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Correlations Find global opportunities by holding instruments from different markets |