Correlation Between Teck Resources and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Nouveau Monde 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 Nouveau Monde 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 Nouveau Monde Graphite, you can compare the effects of market volatilities on Teck Resources and Nouveau Monde 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 Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Nouveau Monde.
Diversification Opportunities for Teck Resources and Nouveau Monde
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teck and Nouveau is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Ltd and Nouveau Monde Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Monde Graphite 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 Nouveau Monde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Monde Graphite has no effect on the direction of Teck Resources i.e., Teck Resources and Nouveau Monde go up and down completely randomly.
Pair Corralation between Teck Resources and Nouveau Monde
Given the investment horizon of 90 days Teck Resources Ltd is expected to generate 0.61 times more return on investment than Nouveau Monde. However, Teck Resources Ltd is 1.64 times less risky than Nouveau Monde. It trades about 0.05 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.06 per unit of risk. If you would invest 3,681 in Teck Resources Ltd on August 29, 2024 and sell it today you would earn a total of 949.00 from holding Teck Resources Ltd or generate 25.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teck Resources Ltd vs. Nouveau Monde Graphite
Performance |
| Timeline |
| Teck Resources |
| Nouveau Monde Graphite |
Teck Resources and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Nouveau Monde
The main advantage of trading using opposite Teck Resources and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Nouveau Monde 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 Nouveau Monde will offset losses from the drop in Nouveau Monde'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 |
| Nouveau Monde vs. Mason Graphite | Nouveau Monde vs. Northern Graphite | Nouveau Monde vs. Graphite One | Nouveau Monde vs. Lomiko Metals |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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