Correlation Between Trigon Metals and Mountain Boy

Can any of the company-specific risk be diversified away by investing in both Trigon Metals and Mountain Boy 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 Trigon Metals and Mountain Boy into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Trigon Metals and Mountain Boy

0.72

Correlation Coefficient

Trigon Metals  Mountain Boy

Poor diversification

The 3 months correlation between Trigon and Mountain is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Trigon Metals and Mountain Boy Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Boy Minerals and Trigon Metals 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 Trigon Metals are associated (or correlated) with Mountain Boy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Boy Minerals has no effect on the direction of Trigon Metals i.e., Trigon Metals and Mountain Boy go up and down completely randomly.

Pair Corralation between Trigon Metals and Mountain Boy

Given the investment horizon of 90 days Trigon Metals is expected to under-perform the Mountain Boy. But the stock apears to be less risky and, when comparing its historical volatility, Trigon Metals is 5.47 times less risky than Mountain Boy. The stock trades about -0.21 of its potential returns per unit of risk. The Mountain Boy Minerals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Mountain Boy Minerals on October 11, 2024 and sell it today you would lose (1.50) from holding Mountain Boy Minerals or give up 50.0% of portfolio value over 90 days.

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

Trigon Metals  vs.  Mountain Boy Minerals

Trigon Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trigon Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Mountain Boy Minerals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mountain Boy Minerals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mountain Boy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trigon Metals and Mountain Boy

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

The idea behind Trigon Metals and Mountain Boy 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 Commodity Directory module to find actively traded commodities issued by global exchanges.