Correlation Between Triumph Gold and Torq Resources

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

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

Diversification Opportunities for Triumph Gold and Torq Resources

-0.36

Correlation Coefficient

Triumph Gold  Torq Resources

Very good diversification

The 3 months correlation between Triumph and Torq is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Gold Corp and Torq Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torq Resources and Triumph 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 Triumph Gold Corp are associated (or correlated) with Torq Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torq Resources has no effect on the direction of Triumph Gold i.e., Triumph Gold and Torq Resources go up and down completely randomly.

Pair Corralation between Triumph Gold and Torq Resources

Assuming the 90 days horizon Triumph Gold Corp is expected to generate 0.7 times more return on investment than Torq Resources. However, Triumph Gold Corp is 1.43 times less risky than Torq Resources. It trades about 0.1 of its potential returns per unit of risk. Torq Resources is currently generating about 0.03 per unit of risk. If you would invest  17.00  in Triumph Gold Corp on September 5, 2024 and sell it today you would earn a total of  6.00  from holding Triumph Gold Corp or generate 35.29% return on investment over 90 days.

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

Triumph Gold Corp  vs.  Torq Resources

Triumph Gold Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triumph Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Triumph Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Torq Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Torq Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Torq Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triumph Gold and Torq Resources

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

The idea behind Triumph Gold Corp and Torq Resources 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.