Correlation Between Imperial Metals and Taseko Mines

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

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

Diversification Opportunities for Imperial Metals and Taseko Mines

0.75

Correlation Coefficient

Imperial Metals  Taseko Mines

Poor diversification

The 3 months correlation between Imperial and Taseko is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines and Imperial Metals 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 Imperial Metals 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 Imperial Metals i.e., Imperial Metals and Taseko Mines go up and down completely randomly.

Pair Corralation between Imperial Metals and Taseko Mines

Assuming the 90 days trading horizon Imperial Metals is expected to generate 0.81 times more return on investment than Taseko Mines. However, Imperial Metals is 1.23 times less risky than Taseko Mines. It trades about 0.23 of its potential returns per unit of risk. Taseko Mines is currently generating about 0.09 per unit of risk. If you would invest  178.00  in Imperial Metals on December 30, 2024 and sell it today you would earn a total of  92.00  from holding Imperial Metals or generate 51.69% return on investment over 90 days.

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

Imperial Metals  vs.  Taseko Mines

Imperial Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Imperial Metals are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Imperial Metals 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 Imperial Metals and Taseko Mines

The main advantage of trading using opposite Imperial Metals and Taseko Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals 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 Imperial Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.