Correlation Between Taseko Mines and First Quantum

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

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

Diversification Opportunities for Taseko Mines and First Quantum

0.21

Correlation Coefficient

Taseko Mines  First Quantum

Modest diversification

The 3 months correlation between Taseko and First is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Taseko Mines and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals and Taseko Mines 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 Taseko Mines are associated (or correlated) with First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Taseko Mines i.e., Taseko Mines and First Quantum go up and down completely randomly.

Pair Corralation between Taseko Mines and First Quantum

Considering the 90-day investment horizon Taseko Mines is expected to under-perform the First Quantum. In addition to that, Taseko Mines is 1.09 times more volatile than First Quantum Minerals. It trades about -0.04 of its total potential returns per unit of risk. First Quantum Minerals is currently generating about 0.01 per unit of volatility. If you would invest  1,330  in First Quantum Minerals on September 21, 2024 and sell it today you would lose (22.00) from holding First Quantum Minerals or give up 1.65% of portfolio value over 90 days.

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

Taseko Mines  vs.  First Quantum Minerals

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.

First Quantum Minerals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Quantum Minerals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, First Quantum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Taseko Mines and First Quantum

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

The idea behind Taseko Mines and First Quantum Minerals 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.