Correlation Between Hudbay Minerals and Taseko Mines

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

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

Diversification Opportunities for Hudbay Minerals and Taseko Mines

0.53

Correlation Coefficient

Hudbay Minerals  Taseko Mines

Very weak diversification

The 3 months correlation between Hudbay and Taseko is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hudbay Minerals and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines and Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals i.e., Hudbay Minerals and Taseko Mines go up and down completely randomly.

Pair Corralation between Hudbay Minerals and Taseko Mines

Considering the 90-day investment horizon Hudbay Minerals is expected to under-perform the Taseko Mines. In addition to that, Hudbay Minerals is 1.0 times more volatile than Taseko Mines. It trades about -0.13 of its total potential returns per unit of risk. Taseko Mines is currently generating about -0.05 per unit of volatility. If you would invest  208.00  in Taseko Mines on September 21, 2024 and sell it today you would lose (9.00) from holding Taseko Mines or give up 4.33% of portfolio value over 90 days.

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

Hudbay Minerals  vs.  Taseko Mines

Hudbay Minerals

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hudbay Minerals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Hudbay Minerals is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Taseko Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taseko Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and 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 Hudbay Minerals and Taseko Mines

The main advantage of trading using opposite Hudbay Minerals and Taseko Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudbay Minerals 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 Hudbay Minerals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.