Correlation Between Ferroglobe PLC and Trilogy Metals
Can any of the company-specific risk be diversified away by investing in both Ferroglobe PLC and Trilogy 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 Ferroglobe PLC and Trilogy Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferroglobe PLC and Trilogy Metals, you can compare the effects of market volatilities on Ferroglobe PLC and Trilogy 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 Ferroglobe PLC with a short position of Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferroglobe PLC and Trilogy Metals.
Diversification Opportunities for Ferroglobe PLC and Trilogy Metals
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ferroglobe and Trilogy is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ferroglobe PLC and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy Metals and Ferroglobe PLC 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 Ferroglobe PLC are associated (or correlated) with Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Ferroglobe PLC i.e., Ferroglobe PLC and Trilogy Metals go up and down completely randomly.
Pair Corralation between Ferroglobe PLC and Trilogy Metals
Considering the 90-day investment horizon Ferroglobe PLC is expected to generate 20.24 times less return on investment than Trilogy Metals. But when comparing it to its historical volatility, Ferroglobe PLC is 2.07 times less risky than Trilogy Metals. It trades about 0.01 of its potential returns per unit of risk. Trilogy Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Trilogy Metals on November 2, 2024 and sell it today you would earn a total of 67.00 from holding Trilogy Metals or generate 113.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferroglobe PLC vs. Trilogy Metals
Performance |
| Timeline |
| Ferroglobe PLC |
| Trilogy Metals |
Ferroglobe PLC and Trilogy Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferroglobe PLC and Trilogy Metals
The main advantage of trading using opposite Ferroglobe PLC and Trilogy Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferroglobe PLC position performs unexpectedly, Trilogy 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 Trilogy Metals will offset losses from the drop in Trilogy Metals' long position.| Ferroglobe PLC vs. Fury Gold Mines | Ferroglobe PLC vs. IperionX Limited American | Ferroglobe PLC vs. EMX Royalty Corp | Ferroglobe PLC vs. Materion |
| Trilogy Metals vs. Fury Gold Mines | Trilogy Metals vs. EMX Royalty Corp | Trilogy Metals vs. Western Copper and | Trilogy Metals vs. Nevada King Gold |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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