Correlation Between Troilus Gold and Golden Minerals

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

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

Diversification Opportunities for Troilus Gold and Golden Minerals

-0.43

Correlation Coefficient

Troilus Gold  Golden Minerals

Very good diversification

The 3 months correlation between Troilus and Golden is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and Golden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Minerals and Troilus 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 Troilus Gold Corp are associated (or correlated) with Golden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Minerals has no effect on the direction of Troilus Gold i.e., Troilus Gold and Golden Minerals go up and down completely randomly.

Pair Corralation between Troilus Gold and Golden Minerals

Assuming the 90 days trading horizon Troilus Gold Corp is expected to under-perform the Golden Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Troilus Gold Corp is 1.46 times less risky than Golden Minerals. The stock trades about -0.01 of its potential returns per unit of risk. The Golden Minerals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Golden Minerals on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Golden Minerals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Troilus Gold Corp  vs.  Golden Minerals

Troilus Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Golden Minerals

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Troilus Gold and Golden Minerals

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

The idea behind Troilus Gold Corp and Golden Minerals 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.