Correlation Between Nouveau Monde and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Nouveau Monde 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 Nouveau Monde and Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nouveau Monde Graphite and Teck Resources Ltd, you can compare the effects of market volatilities on Nouveau Monde 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 Nouveau Monde with a short position of Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nouveau Monde and Teck Resources.
Diversification Opportunities for Nouveau Monde and Teck Resources
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nouveau and Teck is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nouveau Monde Graphite and Teck Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and Nouveau Monde 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 Nouveau Monde Graphite 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 Nouveau Monde i.e., Nouveau Monde and Teck Resources go up and down completely randomly.
Pair Corralation between Nouveau Monde and Teck Resources
Considering the 90-day investment horizon Nouveau Monde Graphite is expected to under-perform the Teck Resources. In addition to that, Nouveau Monde is 1.21 times more volatile than Teck Resources Ltd. It trades about -0.1 of its total potential returns per unit of risk. Teck Resources Ltd is currently generating about 0.05 per unit of volatility. If you would invest 4,414 in Teck Resources Ltd on September 2, 2024 and sell it today you would earn a total of 254.00 from holding Teck Resources Ltd or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nouveau Monde Graphite vs. Teck Resources Ltd
Performance |
| Timeline |
| Nouveau Monde Graphite |
| Teck Resources |
Nouveau Monde and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nouveau Monde and Teck Resources
The main advantage of trading using opposite Nouveau Monde and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nouveau Monde 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.| Nouveau Monde vs. Teck Resources Ltd | Nouveau Monde vs. Sigma Lithium Resources | Nouveau Monde vs. Vale SA ADR | Nouveau Monde 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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