Correlation Between Champion Bear and Troilus Gold

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

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

Diversification Opportunities for Champion Bear and Troilus Gold

-0.32

Correlation Coefficient

Champion Bear  Troilus Gold

Very good diversification

The 3 months correlation between Champion and Troilus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear 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 Champion Bear 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 Champion Bear 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 Champion Bear i.e., Champion Bear and Troilus Gold go up and down completely randomly.

Pair Corralation between Champion Bear and Troilus Gold

Assuming the 90 days horizon Champion Bear Resources is expected to generate 10.19 times more return on investment than Troilus Gold. However, Champion Bear is 10.19 times more volatile than Troilus Gold Corp. It trades about 0.17 of its potential returns per unit of risk. Troilus Gold Corp is currently generating about -0.09 per unit of risk. If you would invest  2.00  in Champion Bear Resources on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Champion Bear Resources or generate 0.0% return on investment over 90 days.

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

Champion Bear Resources  vs.  Troilus Gold Corp

Champion Bear Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Champion Bear Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Champion Bear reported solid returns over the last few months and may actually be approaching a breakup point.

Troilus Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Troilus Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Champion Bear and Troilus Gold

The main advantage of trading using opposite Champion Bear and Troilus Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear 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 Champion Bear 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..