Correlation Between Lundin Mining and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Lundin Mining 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 Lundin Mining and Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining and Teck Resources Limited, you can compare the effects of market volatilities on Lundin Mining 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 Lundin Mining with a short position of Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and Teck Resources.
Diversification Opportunities for Lundin Mining and Teck Resources
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lundin and Teck is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and Lundin Mining 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 Lundin Mining 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 Lundin Mining i.e., Lundin Mining and Teck Resources go up and down completely randomly.
Pair Corralation between Lundin Mining and Teck Resources
Assuming the 90 days trading horizon Lundin Mining is expected to generate 1.38 times less return on investment than Teck Resources. In addition to that, Lundin Mining is 1.4 times more volatile than Teck Resources Limited. It trades about 0.02 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 6,485 in Teck Resources Limited on August 25, 2024 and sell it today you would earn a total of 58.00 from holding Teck Resources Limited or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Mining vs. Teck Resources Limited
Performance |
| Timeline |
| Lundin Mining |
| Teck Resources |
Lundin Mining and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Mining and Teck Resources
The main advantage of trading using opposite Lundin Mining and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining 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.| Lundin Mining vs. HudBay Minerals | Lundin Mining vs. First Quantum Minerals | Lundin Mining vs. Ivanhoe Mines | Lundin Mining vs. Capstone Mining Corp |
| Teck Resources vs. First Majestic Silver | Teck Resources vs. Ivanhoe Energy | Teck Resources vs. Orezone Gold Corp | Teck Resources vs. Faraday Copper 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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