Correlation Between Teck Resources and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both Teck Resources and Nexa 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 Teck Resources and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teck Resources Ltd and Nexa Resources SA, you can compare the effects of market volatilities on Teck Resources and Nexa 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 Teck Resources with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teck Resources and Nexa Resources.
Diversification Opportunities for Teck Resources and Nexa Resources
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teck and Nexa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Teck Resources Ltd and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA 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 Ltd are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Teck Resources i.e., Teck Resources and Nexa Resources go up and down completely randomly.
Pair Corralation between Teck Resources and Nexa Resources
Given the investment horizon of 90 days Teck Resources Ltd is expected to generate 0.94 times more return on investment than Nexa Resources. However, Teck Resources Ltd is 1.06 times less risky than Nexa Resources. It trades about 0.02 of its potential returns per unit of risk. Nexa Resources SA is currently generating about 0.01 per unit of risk. If you would invest 3,474 in Teck Resources Ltd on December 2, 2024 and sell it today you would earn a total of 559.00 from holding Teck Resources Ltd or generate 16.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Teck Resources Ltd vs. Nexa Resources SA
Performance |
Timeline |
Teck Resources |
Nexa Resources SA |
Teck Resources and Nexa Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teck Resources and Nexa Resources
The main advantage of trading using opposite Teck Resources and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teck Resources position performs unexpectedly, Nexa 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.Teck Resources vs. Rio Tinto ADR | Teck Resources vs. Vale SA ADR | Teck Resources vs. MP Materials Corp | Teck Resources vs. Lithium Americas Corp |
Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty Corp |
Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |