Correlation Between Trellus Health and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Trellus Health and Golden Metal 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 Trellus Health and Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trellus Health plc and Golden Metal Resources, you can compare the effects of market volatilities on Trellus Health and Golden Metal 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 Trellus Health with a short position of Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellus Health and Golden Metal.
Diversification Opportunities for Trellus Health and Golden Metal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trellus and Golden is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health plc and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources and Trellus Health 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 Trellus Health plc are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Trellus Health i.e., Trellus Health and Golden Metal go up and down completely randomly.
Pair Corralation between Trellus Health and Golden Metal
Assuming the 90 days trading horizon Trellus Health plc is expected to generate 15.88 times more return on investment than Golden Metal. However, Trellus Health is 15.88 times more volatile than Golden Metal Resources. It trades about 0.07 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.04 per unit of risk. If you would invest 165.00 in Trellus Health plc on October 30, 2024 and sell it today you would earn a total of 105.00 from holding Trellus Health plc or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trellus Health plc vs. Golden Metal Resources
Performance |
| Timeline |
| Trellus Health plc |
| Golden Metal Resources |
Trellus Health and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trellus Health and Golden Metal
The main advantage of trading using opposite Trellus Health and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Trellus Health vs. Gruppo MutuiOnline SpA | Trellus Health vs. PPHE Hotel Group | Trellus Health vs. Dalata Hotel Group | Trellus Health vs. Beowulf Mining |
| Golden Metal vs. Givaudan SA | Golden Metal vs. Atalaya Mining | Golden Metal vs. Central Asia Metals | Golden Metal vs. Metals Exploration Plc |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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