Correlation Between Troilus Gold and Cartier Resources

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

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

Diversification Opportunities for Troilus Gold and Cartier Resources

-0.4

Correlation Coefficient

Troilus Gold  Cartier Resources

Very good diversification

The 3 months correlation between Troilus and Cartier is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and Cartier Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartier Resources and Troilus 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 Troilus Gold Corp are associated (or correlated) with Cartier Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartier Resources has no effect on the direction of Troilus Gold i.e., Troilus Gold and Cartier Resources go up and down completely randomly.

Pair Corralation between Troilus Gold and Cartier Resources

Assuming the 90 days trading horizon Troilus Gold Corp is expected to under-perform the Cartier Resources. But the stock apears to be less risky and, when comparing its historical volatility, Troilus Gold Corp is 1.65 times less risky than Cartier Resources. The stock trades about -0.07 of its potential returns per unit of risk. The Cartier Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  9.00  in Cartier Resources on September 22, 2024 and sell it today you would lose (0.50) from holding Cartier Resources or give up 5.56% of portfolio value over 90 days.

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

Troilus Gold Corp  vs.  Cartier Resources

Troilus Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Troilus Gold 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cartier Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cartier Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cartier Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Troilus Gold and Cartier Resources

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

The idea behind Troilus Gold Corp and Cartier 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.

Check out your portfolio center.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.