Correlation Between Boss Resources and Troilus Gold

Can any of the company-specific risk be diversified away by investing in both Boss Resources and Troilus Gold 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 Boss Resources and Troilus Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boss Resources and Troilus Gold Corp, you can compare the effects of market volatilities on Boss Resources and Troilus Gold 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 Boss Resources with a short position of Troilus Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boss Resources and Troilus Gold.

Diversification Opportunities for Boss Resources and Troilus Gold

-0.25

Correlation Coefficient

Boss Resources  Troilus Gold

Very good diversification

The 3 months correlation between Boss and Troilus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Boss Resources and Troilus Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troilus Gold Corp and Boss 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 Boss Resources are associated (or correlated) with Troilus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troilus Gold Corp has no effect on the direction of Boss Resources i.e., Boss Resources and Troilus Gold go up and down completely randomly.

Pair Corralation between Boss Resources and Troilus Gold

Assuming the 90 days horizon Boss Resources is expected to generate 0.71 times more return on investment than Troilus Gold. However, Boss Resources is 1.42 times less risky than Troilus Gold. It trades about 0.0 of its potential returns per unit of risk. Troilus Gold Corp is currently generating about 0.0 per unit of risk. If you would invest  185.00  in Boss Resources on September 3, 2024 and sell it today you would lose (6.00) from holding Boss Resources or give up 3.24% of portfolio value over 90 days.

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

Boss Resources  vs.  Troilus Gold Corp

Boss Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Troilus Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Boss Resources and Troilus Gold

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

The idea behind Boss Resources and Troilus Gold Corp 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.