Correlation Between Asia Broadband and Trilogy Metals

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Can any of the company-specific risk be diversified away by investing in both Asia Broadband and Trilogy Metals 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 Asia Broadband and Trilogy Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Broadband and Trilogy Metals, you can compare the effects of market volatilities on Asia Broadband and Trilogy Metals 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 Asia Broadband with a short position of Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Broadband and Trilogy Metals.

Diversification Opportunities for Asia Broadband and Trilogy Metals

AsiaTrilogyDiversified AwayAsiaTrilogyDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Asia and Trilogy is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asia Broadband and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy Metals and Asia Broadband 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 Asia Broadband are associated (or correlated) with Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Asia Broadband i.e., Asia Broadband and Trilogy Metals go up and down completely randomly.

Pair Corralation between Asia Broadband and Trilogy Metals

Given the investment horizon of 90 days Asia Broadband is expected to generate 1.7 times less return on investment than Trilogy Metals. In addition to that, Asia Broadband is 1.01 times more volatile than Trilogy Metals. It trades about 0.03 of its total potential returns per unit of risk. Trilogy Metals is currently generating about 0.06 per unit of volatility. If you would invest  121.00  in Trilogy Metals on November 18, 2024 and sell it today you would earn a total of  14.00  from holding Trilogy Metals or generate 11.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.39%
ValuesDaily Returns

Asia Broadband  vs.  Trilogy Metals

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-10010203040
JavaScript chart by amCharts 3.21.15AABB TMQ
       Timeline  
Asia Broadband 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Asia Broadband are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Asia Broadband may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.020.0220.0240.0260.0280.030.0320.034
Trilogy Metals 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Trilogy Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Trilogy Metals reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.11.21.31.4

Asia Broadband and Trilogy Metals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-17.37-13.01-8.65-4.290.07324.328.7113.1117.5 0.0080.0090.0100.0110.0120.013
JavaScript chart by amCharts 3.21.15AABB TMQ
       Returns  

Pair Trading with Asia Broadband and Trilogy Metals

The main advantage of trading using opposite Asia Broadband and Trilogy Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Broadband position performs unexpectedly, Trilogy Metals 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 Trilogy Metals will offset losses from the drop in Trilogy Metals' long position.
The idea behind Asia Broadband and Trilogy Metals 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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