Correlation Between NGEx Minerals and Teck Resources
Can any of the company-specific risk be diversified away by investing in both NGEx Minerals 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 NGEx Minerals and Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGEx Minerals and Teck Resources Limited, you can compare the effects of market volatilities on NGEx Minerals 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 NGEx Minerals with a short position of Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGEx Minerals and Teck Resources.
Diversification Opportunities for NGEx Minerals and Teck Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NGEx and Teck is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NGEx Minerals and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and NGEx Minerals 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 NGEx Minerals 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 NGEx Minerals i.e., NGEx Minerals and Teck Resources go up and down completely randomly.
Pair Corralation between NGEx Minerals and Teck Resources
Assuming the 90 days trading horizon NGEx Minerals is expected to generate 1.26 times more return on investment than Teck Resources. However, NGEx Minerals is 1.26 times more volatile than Teck Resources Limited. It trades about 0.11 of its potential returns per unit of risk. Teck Resources Limited is currently generating about 0.06 per unit of risk. If you would invest 700.00 in NGEx Minerals on August 26, 2024 and sell it today you would earn a total of 610.00 from holding NGEx Minerals or generate 87.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NGEx Minerals vs. Teck Resources Limited
Performance |
| Timeline |
| NGEx Minerals |
| Teck Resources |
NGEx Minerals and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGEx Minerals and Teck Resources
The main advantage of trading using opposite NGEx Minerals and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGEx Minerals 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.| NGEx Minerals vs. HOME DEPOT CDR | NGEx Minerals vs. Aya Gold Silver | NGEx Minerals vs. WELL Health Technologies | NGEx Minerals vs. Capstone Mining 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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