Correlation Between Adventus Mining and Trilogy Metals

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

By analyzing existing cross correlation between Adventus Mining and Trilogy Metals, you can compare the effects of market volatilities on Adventus Mining 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 Adventus Mining with a short position of Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adventus Mining and Trilogy Metals.

Diversification Opportunities for Adventus Mining and Trilogy Metals

0.0

Correlation Coefficient

Adventus Mining  Trilogy Metals

Pay attention - limited upside

The 3 months correlation between Adventus and Trilogy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adventus Mining and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy Metals and Adventus Mining 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 Adventus Mining 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 Adventus Mining i.e., Adventus Mining and Trilogy Metals go up and down completely randomly.

Pair Corralation between Adventus Mining and Trilogy Metals

Assuming the 90 days horizon Adventus Mining is expected to generate 3.23 times less return on investment than Trilogy Metals. But when comparing it to its historical volatility, Adventus Mining is 1.19 times less risky than Trilogy Metals. It trades about 0.02 of its potential returns per unit of risk. Trilogy Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  65.00  in Trilogy Metals on October 25, 2024 and sell it today you would earn a total of  77.00  from holding Trilogy Metals or generate 118.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	76.88%
Values	Daily Returns

Adventus Mining  vs.  Trilogy Metals

Adventus Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adventus Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Adventus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Trilogy Metals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trilogy Metals are ranked lower than 12 (%) 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.

Pair Trading with Adventus Mining and Trilogy Metals

The main advantage of trading using opposite Adventus Mining and Trilogy Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adventus Mining 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 Adventus Mining 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.