Correlation Between US GoldMining and Teck Resources
Can any of the company-specific risk be diversified away by investing in both US GoldMining and Teck Resources 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 US GoldMining and Teck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US GoldMining Warrant and Teck Resources Ltd, you can compare the effects of market volatilities on US GoldMining and Teck Resources 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 US GoldMining with a short position of Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of US GoldMining and Teck Resources.
Diversification Opportunities for US GoldMining and Teck Resources
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between USGOW and Teck is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding US GoldMining Warrant and Teck Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and US GoldMining 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 US GoldMining Warrant are associated (or correlated) with Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of US GoldMining i.e., US GoldMining and Teck Resources go up and down completely randomly.
Pair Corralation between US GoldMining and Teck Resources
Assuming the 90 days horizon US GoldMining Warrant is expected to generate 8.35 times more return on investment than Teck Resources. However, US GoldMining is 8.35 times more volatile than Teck Resources Ltd. It trades about 0.24 of its potential returns per unit of risk. Teck Resources Ltd is currently generating about -0.07 per unit of risk. If you would invest 51.00 in US GoldMining Warrant on August 25, 2024 and sell it today you would earn a total of 129.00 from holding US GoldMining Warrant or generate 252.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.56% |
| Values | Daily Returns |
US GoldMining Warrant vs. Teck Resources Ltd
Performance |
| Timeline |
| US GoldMining Warrant |
| Teck Resources |
US GoldMining and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US GoldMining and Teck Resources
The main advantage of trading using opposite US GoldMining and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US GoldMining position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| US GoldMining vs. Vale SA ADR | US GoldMining vs. Teck Resources Ltd | US GoldMining vs. MP Materials Corp | US GoldMining vs. BHP Group Limited |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |