Correlation Between National Bank and Trillium Gold

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

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

Diversification Opportunities for National Bank and Trillium Gold

0.0

Correlation Coefficient

National Bank  Trillium Gold

Pay attention - limited upside

The 3 months correlation between National and Trillium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 National Bank 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 National Bank of 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 National Bank i.e., National Bank and Trillium Gold go up and down completely randomly.

Pair Corralation between National Bank and Trillium Gold

If you would invest  2,308  in National Bank of on October 5, 2024 and sell it today you would earn a total of  203.00  from holding National Bank of or generate 8.8% return on investment over 90 days.

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

National Bank of  vs.  Trillium Gold Mines

National Bank

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, National Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 National Bank and Trillium Gold

The main advantage of trading using opposite National Bank and Trillium Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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 National Bank of 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.