Correlation Between E Split and Teck Resources

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

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

Diversification Opportunities for E Split and Teck Resources

-0.67

Correlation Coefficient

E Split  Teck Resources

Excellent diversification

The 3 months correlation between ENS-PA and Teck is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources and E Split 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 E Split Corp 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 E Split i.e., E Split and Teck Resources go up and down completely randomly.

Pair Corralation between E Split and Teck Resources

Assuming the 90 days trading horizon E Split Corp is expected to generate 0.3 times more return on investment than Teck Resources. However, E Split Corp is 3.28 times less risky than Teck Resources. It trades about 0.17 of its potential returns per unit of risk. Teck Resources Limited is currently generating about -0.08 per unit of risk. If you would invest  1,043  in E Split Corp on September 22, 2024 and sell it today you would earn a total of  76.00  from holding E Split Corp or generate 7.29% return on investment over 90 days.

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

E Split Corp  vs.  Teck Resources Limited

E Split Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, E Split may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Teck Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teck Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with E Split and Teck Resources

The main advantage of trading using opposite E Split and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split 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.

The idea behind E Split Corp and Teck Resources Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.