Correlation Between Patagonia Gold and Trisura

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Can any of the company-specific risk be diversified away by investing in both Patagonia Gold and Trisura 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 Patagonia Gold and Trisura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patagonia Gold Corp and Trisura Group, you can compare the effects of market volatilities on Patagonia Gold and Trisura 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 Patagonia Gold with a short position of Trisura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patagonia Gold and Trisura.

Diversification Opportunities for Patagonia Gold and Trisura

PatagoniaTrisuraDiversified AwayPatagoniaTrisuraDiversified Away100%
-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Patagonia and Trisura is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Patagonia Gold Corp and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group and Patagonia Gold 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 Patagonia Gold Corp are associated (or correlated) with Trisura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of Patagonia Gold i.e., Patagonia Gold and Trisura go up and down completely randomly.

Pair Corralation between Patagonia Gold and Trisura

Assuming the 90 days trading horizon Patagonia Gold Corp is expected to generate 9.98 times more return on investment than Trisura. However, Patagonia Gold is 9.98 times more volatile than Trisura Group. It trades about 0.09 of its potential returns per unit of risk. Trisura Group is currently generating about 0.01 per unit of risk. If you would invest  2.00  in Patagonia Gold Corp on November 21, 2024 and sell it today you would earn a total of  3.00  from holding Patagonia Gold Corp or generate 150.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Patagonia Gold Corp  vs.  Trisura Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15PGDC TSU
       Timeline  
Patagonia Gold Corp 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Patagonia Gold Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Patagonia Gold showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.030.0350.040.0450.05
Trisura Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Trisura Group 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb323436384042

Patagonia Gold and Trisura Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-34.25-25.65-17.05-8.45-0.148.6617.6226.5935.5544.51 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15PGDC TSU
       Returns  

Pair Trading with Patagonia Gold and Trisura

The main advantage of trading using opposite Patagonia Gold and Trisura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patagonia Gold position performs unexpectedly, Trisura 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 Trisura will offset losses from the drop in Trisura's long position.
The idea behind Patagonia Gold Corp and Trisura Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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