Correlation Between Teck Resources and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Aurelia 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 Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teck Resources Ltd and Aurelia Metals Limited, you can compare the effects of market volatilities on Teck Resources and Aurelia 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 Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Aurelia Metals.
Diversification Opportunities for Teck Resources and Aurelia Metals
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teck and Aurelia is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Ltd and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals 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 Ltd are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Teck Resources i.e., Teck Resources and Aurelia Metals go up and down completely randomly.
Pair Corralation between Teck Resources and Aurelia Metals
Given the investment horizon of 90 days Teck Resources Ltd is expected to generate 0.61 times more return on investment than Aurelia Metals. However, Teck Resources Ltd is 1.63 times less risky than Aurelia Metals. It trades about -0.05 of its potential returns per unit of risk. Aurelia Metals Limited is currently generating about -0.21 per unit of risk. If you would invest 4,774 in Teck Resources Ltd on August 29, 2024 and sell it today you would lose (144.00) from holding Teck Resources Ltd or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teck Resources Ltd vs. Aurelia Metals Limited
Performance |
| Timeline |
| Teck Resources |
| Aurelia Metals |
Teck Resources and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Aurelia Metals
The main advantage of trading using opposite Teck Resources and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Aurelia 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Teck Resources vs. Vale SA ADR | Teck Resources vs. BHP Group Limited | Teck Resources vs. Glencore PLC ADR | Teck Resources vs. Piedmont Lithium Ltd |
| Aurelia Metals vs. Champion Bear Resources | Aurelia Metals vs. Baroyeca Gold Silver | Aurelia Metals vs. Centaurus Metals Limited | Aurelia Metals vs. Edison Cobalt 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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