Correlation Between Terreno Resources and HudBay Minerals
Can any of the company-specific risk be diversified away by investing in both Terreno Resources and HudBay Minerals 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 Terreno Resources and HudBay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Resources Corp and HudBay Minerals, you can compare the effects of market volatilities on Terreno Resources and HudBay Minerals 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 Terreno Resources with a short position of HudBay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Resources and HudBay Minerals.
Diversification Opportunities for Terreno Resources and HudBay Minerals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Terreno and HudBay is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Resources Corp and HudBay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HudBay Minerals and Terreno 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 Terreno Resources Corp are associated (or correlated) with HudBay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HudBay Minerals has no effect on the direction of Terreno Resources i.e., Terreno Resources and HudBay Minerals go up and down completely randomly.
Pair Corralation between Terreno Resources and HudBay Minerals
Assuming the 90 days trading horizon Terreno Resources Corp is expected to generate 6.66 times more return on investment than HudBay Minerals. However, Terreno Resources is 6.66 times more volatile than HudBay Minerals. It trades about 0.07 of its potential returns per unit of risk. HudBay Minerals is currently generating about 0.05 per unit of risk. If you would invest 3.00 in Terreno Resources Corp on August 25, 2024 and sell it today you would lose (2.00) from holding Terreno Resources Corp or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Terreno Resources Corp vs. HudBay Minerals
Performance |
| Timeline |
| Terreno Resources Corp |
| HudBay Minerals |
Terreno Resources and HudBay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Resources and HudBay Minerals
The main advantage of trading using opposite Terreno Resources and HudBay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Resources position performs unexpectedly, HudBay Minerals 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 HudBay Minerals will offset losses from the drop in HudBay Minerals' long position.| Terreno Resources vs. T2 Metals Corp | Terreno Resources vs. Brookfield Office Properties | Terreno Resources vs. Advent Wireless | Terreno Resources vs. Algonquin Power Utilities |
| HudBay Minerals vs. Lundin Mining | HudBay Minerals vs. First Quantum Minerals | HudBay Minerals vs. Ivanhoe Mines | HudBay Minerals vs. Capstone Mining 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |