Correlation Between Infinico Metals and TRX Gold

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

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

Diversification Opportunities for Infinico Metals and TRX Gold

-0.62

Correlation Coefficient

Infinico Metals  TRX Gold

Excellent diversification

The 3 months correlation between Infinico and TRX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and TRX Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRX Gold Corp and Infinico 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 Infinico Metals Corp are associated (or correlated) with TRX Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRX Gold Corp has no effect on the direction of Infinico Metals i.e., Infinico Metals and TRX Gold go up and down completely randomly.

Pair Corralation between Infinico Metals and TRX Gold

Assuming the 90 days trading horizon Infinico Metals is expected to generate 25.51 times less return on investment than TRX Gold. But when comparing it to its historical volatility, Infinico Metals Corp is 8.68 times less risky than TRX Gold. It trades about 0.03 of its potential returns per unit of risk. TRX Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  46.00  in TRX Gold Corp on September 22, 2024 and sell it today you would earn a total of  4,524  from holding TRX Gold Corp or generate 9834.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.6%
Values	Daily Returns

Infinico Metals Corp  vs.  TRX Gold Corp

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

TRX Gold Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRX Gold Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, TRX Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and TRX Gold

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

The idea behind Infinico Metals Corp and TRX Gold 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..