Correlation Between Tristar Gold and Maritime Resources

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

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

Diversification Opportunities for Tristar Gold and Maritime Resources

0.37

Correlation Coefficient

Tristar Gold  Maritime Resources

Weak diversification

The 3 months correlation between Tristar and Maritime is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tristar Gold and Maritime Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maritime Resources Corp and Tristar 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 Tristar Gold are associated (or correlated) with Maritime Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maritime Resources Corp has no effect on the direction of Tristar Gold i.e., Tristar Gold and Maritime Resources go up and down completely randomly.

Pair Corralation between Tristar Gold and Maritime Resources

Assuming the 90 days horizon Tristar Gold is expected to generate 1.34 times less return on investment than Maritime Resources. In addition to that, Tristar Gold is 1.27 times more volatile than Maritime Resources Corp. It trades about 0.1 of its total potential returns per unit of risk. Maritime Resources Corp is currently generating about 0.17 per unit of volatility. If you would invest  5.50  in Maritime Resources Corp on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Maritime Resources Corp or generate 54.55% return on investment over 90 days.

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

Tristar Gold  vs.  Maritime Resources Corp

Tristar Gold

Risk-Adjusted Performance

OK

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

Maritime Resources Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maritime Resources Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Maritime Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tristar Gold and Maritime Resources

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

The idea behind Tristar Gold and Maritime Resources Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.