Correlation Between TRX Gold and International Tower
Can any of the company-specific risk be diversified away by investing in both TRX Gold and International Tower 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 TRX Gold and International Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRX Gold Corp and International Tower Hill, you can compare the effects of market volatilities on TRX Gold and International Tower 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 TRX Gold with a short position of International Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRX Gold and International Tower.
Diversification Opportunities for TRX Gold and International Tower
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TRX and International is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TRX Gold Corp and International Tower Hill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Tower Hill and TRX 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 TRX Gold Corp are associated (or correlated) with International Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Tower Hill has no effect on the direction of TRX Gold i.e., TRX Gold and International Tower go up and down completely randomly.
Pair Corralation between TRX Gold and International Tower
Assuming the 90 days trading horizon TRX Gold Corp is expected to generate 18.0 times more return on investment than International Tower. However, TRX Gold is 18.0 times more volatile than International Tower Hill. It trades about 0.08 of its potential returns per unit of risk. International Tower Hill is currently generating about 0.02 per unit of risk. If you would invest 56.00 in TRX Gold Corp on November 2, 2024 and sell it today you would earn a total of 4,499 from holding TRX Gold Corp or generate 8033.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
TRX Gold Corp vs. International Tower Hill
Performance |
| Timeline |
| TRX Gold Corp |
| International Tower Hill |
TRX Gold and International Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRX Gold and International Tower
The main advantage of trading using opposite TRX Gold and International Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRX Gold position performs unexpectedly, International Tower 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 International Tower will offset losses from the drop in International Tower's long position.The idea behind TRX Gold Corp and International Tower Hill 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.| International Tower vs. Xtra Gold Resources Corp | International Tower vs. Loncor Resources | International Tower vs. TRX Gold Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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