Correlation Between Teck Resources and Fortuna Silver
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Fortuna Silver 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 Fortuna Silver 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 Fortuna Silver Mines, you can compare the effects of market volatilities on Teck Resources and Fortuna Silver 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 Fortuna Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Fortuna Silver.
Diversification Opportunities for Teck Resources and Fortuna Silver
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teck and Fortuna is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Ltd and Fortuna Silver Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortuna Silver Mines 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 Fortuna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortuna Silver Mines has no effect on the direction of Teck Resources i.e., Teck Resources and Fortuna Silver go up and down completely randomly.
Pair Corralation between Teck Resources and Fortuna Silver
Given the investment horizon of 90 days Teck Resources Ltd is expected to generate 0.87 times more return on investment than Fortuna Silver. However, Teck Resources Ltd is 1.15 times less risky than Fortuna Silver. It trades about -0.02 of its potential returns per unit of risk. Fortuna Silver Mines is currently generating about -0.1 per unit of risk. If you would invest 4,774 in Teck Resources Ltd on August 28, 2024 and sell it today you would lose (64.00) from holding Teck Resources Ltd or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teck Resources Ltd vs. Fortuna Silver Mines
Performance |
| Timeline |
| Teck Resources |
| Fortuna Silver Mines |
Teck Resources and Fortuna Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Fortuna Silver
The main advantage of trading using opposite Teck Resources and Fortuna Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Fortuna Silver 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 Fortuna Silver will offset losses from the drop in Fortuna Silver's long position.| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |