Correlation Between Teck Resources and Skeena Resources
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Skeena 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 Teck Resources and Skeena Resources 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 Skeena Resources, you can compare the effects of market volatilities on Teck Resources and Skeena 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 Teck Resources with a short position of Skeena Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Skeena Resources.
Diversification Opportunities for Teck Resources and Skeena Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teck and Skeena is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Limited and Skeena Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skeena Resources 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 Skeena Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skeena Resources has no effect on the direction of Teck Resources i.e., Teck Resources and Skeena Resources go up and down completely randomly.
Pair Corralation between Teck Resources and Skeena Resources
Assuming the 90 days trading horizon Teck Resources Limited is expected to generate 0.51 times more return on investment than Skeena Resources. However, Teck Resources Limited is 1.97 times less risky than Skeena Resources. It trades about -0.05 of its potential returns per unit of risk. Skeena Resources is currently generating about -0.07 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teck Resources Limited vs. Skeena Resources
Performance |
| Timeline |
| Teck Resources |
| Skeena Resources |
Teck Resources and Skeena Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Skeena Resources
The main advantage of trading using opposite Teck Resources and Skeena Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Skeena 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 Skeena Resources will offset losses from the drop in Skeena Resources' 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 |
| Skeena Resources vs. First Majestic Silver | Skeena Resources vs. Ivanhoe Energy | Skeena Resources vs. Orezone Gold Corp | Skeena 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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