Correlation Between Trilogy Metals and SolGold PLC

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

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

Diversification Opportunities for Trilogy Metals and SolGold PLC

0.18

Correlation Coefficient

Trilogy Metals  SolGold PLC

Average diversification

The 3 months correlation between Trilogy and SolGold is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Trilogy Metals and SolGold PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolGold PLC and Trilogy 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 Trilogy Metals are associated (or correlated) with SolGold PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolGold PLC has no effect on the direction of Trilogy Metals i.e., Trilogy Metals and SolGold PLC go up and down completely randomly.

Pair Corralation between Trilogy Metals and SolGold PLC

Assuming the 90 days trading horizon Trilogy Metals is expected to generate 1.32 times more return on investment than SolGold PLC. However, Trilogy Metals is 1.32 times more volatile than SolGold PLC. It trades about 0.12 of its potential returns per unit of risk. SolGold PLC is currently generating about 0.05 per unit of risk. If you would invest  164.00  in Trilogy Metals on December 30, 2024 and sell it today you would earn a total of  66.00  from holding Trilogy Metals or generate 40.24% return on investment over 90 days.

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

Trilogy Metals  vs.  SolGold PLC

Trilogy Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trilogy Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Trilogy Metals displayed solid returns over the last few months and may actually be approaching a breakup point.

SolGold PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SolGold PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, SolGold PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Trilogy Metals and SolGold PLC

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

The idea behind Trilogy Metals and SolGold PLC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.