Correlation Between TRX Gold and Xtra Gold
Can any of the company-specific risk be diversified away by investing in both TRX Gold and Xtra 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 TRX Gold and Xtra Gold 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 Xtra Gold Resources Corp, you can compare the effects of market volatilities on TRX Gold and Xtra 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 TRX Gold with a short position of Xtra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRX Gold and Xtra Gold.
Diversification Opportunities for TRX Gold and Xtra Gold
Poor diversification
The 3 months correlation between TRX and Xtra is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TRX Gold Corp and Xtra Gold Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtra Gold Resources 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 Xtra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtra Gold Resources has no effect on the direction of TRX Gold i.e., TRX Gold and Xtra Gold go up and down completely randomly.
Pair Corralation between TRX Gold and Xtra Gold
Assuming the 90 days trading horizon TRX Gold Corp is expected to generate 38.84 times more return on investment than Xtra Gold. However, TRX Gold is 38.84 times more volatile than Xtra Gold Resources Corp. It trades about 0.09 of its potential returns per unit of risk. Xtra Gold Resources Corp is currently generating about 0.08 per unit of risk. If you would invest 44.00 in TRX Gold Corp on September 3, 2024 and sell it today you would earn a total of 4,198 from holding TRX Gold Corp or generate 9540.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
TRX Gold Corp vs. Xtra Gold Resources Corp
Performance |
| Timeline |
| TRX Gold Corp |
| Xtra Gold Resources |
TRX Gold and Xtra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRX Gold and Xtra Gold
The main advantage of trading using opposite TRX Gold and Xtra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRX Gold position performs unexpectedly, Xtra 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 Xtra Gold will offset losses from the drop in Xtra Gold's long position.| TRX Gold vs. Algoma Steel Group | TRX Gold vs. Champion Iron | TRX Gold vs. International Zeolite Corp | TRX Gold vs. European Residential Real |
| Xtra Gold vs. Algoma Steel Group | Xtra Gold vs. Champion Iron | Xtra Gold vs. International Zeolite Corp | Xtra Gold vs. European Residential Real |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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