Correlation Between Teck Resources and Globex Mining

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Globex Mining 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 Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teck Resources and Globex Mining Enterprises, you can compare the effects of market volatilities on Teck Resources and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Globex Mining.

Diversification Opportunities for Teck Resources and Globex Mining

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Teck and Globex is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Ltd and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 are associated (or correlated) with Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Teck Resources i.e., Teck Resources and Globex Mining go up and down completely randomly.

Pair Corralation between Teck Resources and Globex Mining

Given the investment horizon of 90 days Teck Resources is expected to generate 1.03 times more return on investment than Globex Mining. However, Teck Resources is 1.03 times more volatile than Globex Mining Enterprises. It trades about 0.38 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.17 per unit of risk. If you would invest  3,739  in Teck Resources on December 30, 2023 and sell it today you would earn a total of  839.00  from holding Teck Resources or generate 22.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Teck Resources Ltd  vs.  Globex Mining Enterprises

 Performance 
       Timeline  
Teck Resources 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Teck Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Teck Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.
Globex Mining Enterprises 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Globex Mining Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Teck Resources and Globex Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Teck Resources and Globex Mining

The main advantage of trading using opposite Teck Resources and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.
The idea behind Teck Resources and Globex Mining Enterprises pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine