Correlation Between ROK Resources and Trillion Energy

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

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

Diversification Opportunities for ROK Resources and Trillion Energy

0.44

Correlation Coefficient

ROK Resources  Trillion Energy

Very weak diversification

The 3 months correlation between ROK and Trillion is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ROK Resources and Trillion Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trillion Energy Inte and ROK 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 ROK Resources are associated (or correlated) with Trillion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trillion Energy Inte has no effect on the direction of ROK Resources i.e., ROK Resources and Trillion Energy go up and down completely randomly.

Pair Corralation between ROK Resources and Trillion Energy

Assuming the 90 days horizon ROK Resources is expected to generate 0.46 times more return on investment than Trillion Energy. However, ROK Resources is 2.16 times less risky than Trillion Energy. It trades about 0.02 of its potential returns per unit of risk. Trillion Energy International is currently generating about -0.02 per unit of risk. If you would invest  11.00  in ROK Resources on December 20, 2024 and sell it today you would earn a total of  0.00  from holding ROK Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

ROK Resources  vs.  Trillion Energy International

ROK Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ROK Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, ROK Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Trillion Energy Inte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trillion Energy International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ROK Resources and Trillion Energy

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

The idea behind ROK Resources and Trillion Energy International 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.