Correlation Between Teck Resources and Saga Metals
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Saga Metals 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 Saga Metals 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 Saga Metals Corp, you can compare the effects of market volatilities on Teck Resources and Saga Metals 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 Saga Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Saga Metals.
Diversification Opportunities for Teck Resources and Saga Metals
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teck and Saga is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Limited and Saga Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Metals 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 Saga Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Metals Corp has no effect on the direction of Teck Resources i.e., Teck Resources and Saga Metals go up and down completely randomly.
Pair Corralation between Teck Resources and Saga Metals
Assuming the 90 days trading horizon Teck Resources is expected to generate 18.35 times less return on investment than Saga Metals. But when comparing it to its historical volatility, Teck Resources Limited is 2.51 times less risky than Saga Metals. It trades about 0.02 of its potential returns per unit of risk. Saga Metals Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Saga Metals Corp on November 4, 2024 and sell it today you would earn a total of 3.00 from holding Saga Metals Corp or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teck Resources Limited vs. Saga Metals Corp
Performance |
| Timeline |
| Teck Resources |
| Saga Metals Corp |
Teck Resources and Saga Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Saga Metals
The main advantage of trading using opposite Teck Resources and Saga Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Saga Metals 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 Saga Metals will offset losses from the drop in Saga Metals' long position.| Teck Resources vs. First Quantum Minerals | Teck Resources vs. Nutrien | Teck Resources vs. Lundin Mining | Teck Resources vs. Wheaton Precious Metals |
| Saga Metals vs. Diversified Royalty Corp | Saga Metals vs. InPlay Oil Corp | Saga Metals vs. Canadian General Investments | Saga Metals vs. HPQ Silicon Resources |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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