Correlation Between Teck Resources and Calibre Mining

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

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

Diversification Opportunities for Teck Resources and Calibre Mining

0.57

Correlation Coefficient

Teck Resources  Calibre Mining

Very weak diversification

The 3 months correlation between Teck and Calibre is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Limited and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Limited are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Teck Resources i.e., Teck Resources and Calibre Mining go up and down completely randomly.

Pair Corralation between Teck Resources and Calibre Mining

Assuming the 90 days trading horizon Teck Resources is expected to generate 4.08 times less return on investment than Calibre Mining. But when comparing it to its historical volatility, Teck Resources Limited is 1.32 times less risky than Calibre Mining. It trades about 0.02 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Calibre Mining Corp on September 20, 2024 and sell it today you would earn a total of  129.00  from holding Calibre Mining Corp or generate 143.33% return on investment over 90 days.

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

Teck Resources Limited  vs.  Calibre Mining Corp

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.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Teck Resources and Calibre Mining

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

The idea behind Teck Resources Limited and Calibre Mining Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.