Correlation Between Trigon Metals and Goliath Resources

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

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

Diversification Opportunities for Trigon Metals and Goliath Resources

-0.57

Correlation Coefficient

Trigon Metals  Goliath Resources

Excellent diversification

The 3 months correlation between Trigon and Goliath is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Trigon Metals and Goliath Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Resources 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 Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Trigon Metals i.e., Trigon Metals and Goliath Resources go up and down completely randomly.

Pair Corralation between Trigon Metals and Goliath Resources

Given the investment horizon of 90 days Trigon Metals is expected to under-perform the Goliath Resources. In addition to that, Trigon Metals is 5.97 times more volatile than Goliath Resources. It trades about -0.19 of its total potential returns per unit of risk. Goliath Resources is currently generating about 0.12 per unit of volatility. If you would invest  92.00  in Goliath Resources on March 19, 2024 and sell it today you would earn a total of  6.00  from holding Goliath Resources or generate 6.52% return on investment over 90 days.

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

Trigon Metals  vs.  Goliath Resources

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in July 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Goliath Resources

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goliath Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Goliath Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trigon Metals and Goliath Resources

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

The idea behind Trigon Metals and Goliath Resources 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 Channel module to use Commodity Channel Index to analyze current equity momentum.