Correlation Between Nevada Copper and Trigon Metals

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Can any of the company-specific risk be diversified away by investing in both Nevada Copper and Trigon 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 Nevada Copper and Trigon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nevada Copper Corp and Trigon Metals, you can compare the effects of market volatilities on Nevada Copper and Trigon 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 Nevada Copper with a short position of Trigon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nevada Copper and Trigon Metals.

Diversification Opportunities for Nevada Copper and Trigon Metals

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nevada and Trigon is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nevada Copper Corp and Trigon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigon Metals and Nevada Copper 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 Nevada Copper Corp are associated (or correlated) with Trigon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trigon Metals has no effect on the direction of Nevada Copper i.e., Nevada Copper and Trigon Metals go up and down completely randomly.

Pair Corralation between Nevada Copper and Trigon Metals

Assuming the 90 days horizon Nevada Copper Corp is expected to generate 1.76 times more return on investment than Trigon Metals. However, Nevada Copper is 1.76 times more volatile than Trigon Metals. It trades about 0.1 of its potential returns per unit of risk. Trigon Metals is currently generating about 0.01 per unit of risk. If you would invest  5.00  in Nevada Copper Corp on February 17, 2024 and sell it today you would earn a total of  2.02  from holding Nevada Copper Corp or generate 40.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nevada Copper Corp  vs.  Trigon Metals

 Performance 
       Timeline  
Nevada Copper Corp 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Nevada Copper Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Nevada Copper reported solid returns over the last few months and may actually be approaching a breakup point.
Trigon Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Trigon Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Trigon Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nevada Copper and Trigon Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nevada Copper and Trigon Metals

The main advantage of trading using opposite Nevada Copper and Trigon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nevada Copper position performs unexpectedly, Trigon 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 Trigon Metals will offset losses from the drop in Trigon Metals' long position.
The idea behind Nevada Copper Corp and Trigon Metals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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