Correlation Between Amerigo Resources and Taseko Mines

Can any of the company-specific risk be diversified away by investing in both Amerigo Resources and Taseko Mines 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 Amerigo Resources and Taseko Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amerigo Resources and Taseko Mines, you can compare the effects of market volatilities on Amerigo Resources and Taseko Mines 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 Amerigo Resources with a short position of Taseko Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amerigo Resources and Taseko Mines.

Diversification Opportunities for Amerigo Resources and Taseko Mines

0.81

Correlation Coefficient

Amerigo Resources  Taseko Mines

Very poor diversification

The 3 months correlation between Amerigo and Taseko is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amerigo Resources and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines and Amerigo 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 Amerigo Resources are associated (or correlated) with Taseko Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taseko Mines has no effect on the direction of Amerigo Resources i.e., Amerigo Resources and Taseko Mines go up and down completely randomly.

Pair Corralation between Amerigo Resources and Taseko Mines

Assuming the 90 days trading horizon Amerigo Resources is expected to generate 0.55 times more return on investment than Taseko Mines. However, Amerigo Resources is 1.82 times less risky than Taseko Mines. It trades about 0.17 of its potential returns per unit of risk. Taseko Mines is currently generating about 0.09 per unit of risk. If you would invest  155.00  in Amerigo Resources on December 30, 2024 and sell it today you would earn a total of  36.00  from holding Amerigo Resources or generate 23.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Amerigo Resources  vs.  Taseko Mines

Amerigo Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amerigo Resources are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Amerigo Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Taseko Mines

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Taseko Mines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Taseko Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amerigo Resources and Taseko Mines

The main advantage of trading using opposite Amerigo Resources and Taseko Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amerigo Resources position performs unexpectedly, Taseko Mines 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 Taseko Mines will offset losses from the drop in Taseko Mines' long position.

The idea behind Amerigo Resources and Taseko Mines 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.