Correlation Between Champion Iron and Trillium Gold

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

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

Diversification Opportunities for Champion Iron and Trillium Gold

0.0

Correlation Coefficient

Champion Iron  Trillium Gold

Pay attention - limited upside

The 3 months correlation between Champion and Trillium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Trillium Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trillium Gold Mines and Champion Iron 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 Iron are associated (or correlated) with Trillium Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trillium Gold Mines has no effect on the direction of Champion Iron i.e., Champion Iron and Trillium Gold go up and down completely randomly.

Pair Corralation between Champion Iron and Trillium Gold

If you would invest (100.00) in Trillium Gold Mines on October 9, 2024 and sell it today you would earn a total of  100.00  from holding Trillium Gold Mines or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Champion Iron  vs.  Trillium Gold Mines

Champion Iron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champion Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Trillium Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Champion Iron and Trillium Gold

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

The idea behind Champion Iron and Trillium Gold Mines 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.