Correlation Between Taseko Mines and Hudbay Minerals

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

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

Diversification Opportunities for Taseko Mines and Hudbay Minerals

0.46

Correlation Coefficient

Taseko Mines  Hudbay Minerals

Very weak diversification

The 3 months correlation between Taseko and Hudbay is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Taseko Mines and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay 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 Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Taseko Mines i.e., Taseko Mines and Hudbay Minerals go up and down completely randomly.

Pair Corralation between Taseko Mines and Hudbay Minerals

Considering the 90-day investment horizon Taseko Mines is expected to generate 1.03 times more return on investment than Hudbay Minerals. However, Taseko Mines is 1.03 times more volatile than Hudbay Minerals. It trades about -0.01 of its potential returns per unit of risk. Hudbay Minerals is currently generating about -0.1 per unit of risk. If you would invest  205.00  in Taseko Mines on September 19, 2024 and sell it today you would lose (3.00) from holding Taseko Mines or give up 1.46% of portfolio value over 90 days.

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

Taseko Mines  vs.  Hudbay 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.

Hudbay Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudbay Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Hudbay Minerals is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Taseko Mines and Hudbay Minerals

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

The idea behind Taseko Mines and Hudbay 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.