Correlation Between Teck Resources and Trilogy Metals
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Trilogy 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 Trilogy 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 Trilogy Metals, you can compare the effects of market volatilities on Teck Resources and Trilogy 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 Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Trilogy Metals.
Diversification Opportunities for Teck Resources and Trilogy Metals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teck and Trilogy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Ltd and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy 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 Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Teck Resources i.e., Teck Resources and Trilogy Metals go up and down completely randomly.
Pair Corralation between Teck Resources and Trilogy Metals
Given the investment horizon of 90 days Teck Resources is expected to generate 4.11 times less return on investment than Trilogy Metals. But when comparing it to its historical volatility, Teck Resources Ltd is 2.26 times less risky than Trilogy Metals. It trades about 0.03 of its potential returns per unit of risk. Trilogy Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Trilogy Metals on August 31, 2024 and sell it today you would earn a total of 66.00 from holding Trilogy Metals or generate 120.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Teck Resources Ltd vs. Trilogy Metals
Performance |
| Timeline |
| Teck Resources |
| Trilogy Metals |
Teck Resources and Trilogy Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teck Resources and Trilogy Metals
The main advantage of trading using opposite Teck Resources and Trilogy Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Trilogy 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 Trilogy Metals will offset losses from the drop in Trilogy Metals' long position.| Teck Resources vs. Piedmont Lithium Ltd | Teck Resources vs. Standard Lithium | Teck Resources vs. Vale SA ADR | Teck Resources vs. BHP Group Limited |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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