Correlation Between Troilus Gold and Precious Metals

Can any of the company-specific risk be diversified away by investing in both Troilus Gold and Precious Metals 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 Precious Metals 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 Precious Metals And, you can compare the effects of market volatilities on Troilus Gold and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troilus Gold and Precious Metals.

Diversification Opportunities for Troilus Gold and Precious Metals

0.25

Correlation Coefficient

Troilus Gold  Precious Metals

Modest diversification

The 3 months correlation between Troilus and Precious is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Troilus Gold i.e., Troilus Gold and Precious Metals go up and down completely randomly.

Pair Corralation between Troilus Gold and Precious Metals

Assuming the 90 days trading horizon Troilus Gold Corp is expected to generate 2.36 times more return on investment than Precious Metals. However, Troilus Gold is 2.36 times more volatile than Precious Metals And. It trades about 0.07 of its potential returns per unit of risk. Precious Metals And is currently generating about -0.05 per unit of risk. If you would invest  28.00  in Troilus Gold Corp on October 7, 2024 and sell it today you would earn a total of  3.00  from holding Troilus Gold Corp or generate 10.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Troilus Gold Corp  vs.  Precious Metals And

Troilus Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Troilus Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Troilus Gold is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Precious Metals And

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Precious Metals is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Troilus Gold and Precious Metals

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

The idea behind Troilus Gold Corp and Precious Metals And 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.