Correlation Between Teck Resources and Calibre Mining
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Calibre Mining 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 Teck Resources and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teck Resources Limited and Calibre Mining Corp, you can compare the effects of market volatilities on Teck Resources and Calibre Mining 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 Teck Resources with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Calibre Mining.
Diversification Opportunities for Teck Resources and Calibre Mining
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teck and Calibre is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Limited and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and Teck Resources 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 Teck Resources Limited are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Teck Resources i.e., Teck Resources and Calibre Mining go up and down completely randomly.
Pair Corralation between Teck Resources and Calibre Mining
Assuming the 90 days trading horizon Teck Resources Limited is expected to generate 0.69 times more return on investment than Calibre Mining. However, Teck Resources Limited is 1.44 times less risky than Calibre Mining. It trades about -0.05 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.05 per unit of risk. If you would invest 6,656 in Teck Resources Limited on August 30, 2024 and sell it today you would lose (167.00) from holding Teck Resources Limited or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teck Resources Limited vs. Calibre Mining Corp
Performance |
| Timeline |
| Teck Resources |
| Calibre Mining Corp |
Teck Resources and Calibre Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Calibre Mining
The main advantage of trading using opposite Teck Resources and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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