Correlation Between Troilus Gold and Pan Global

Can any of the company-specific risk be diversified away by investing in both Troilus Gold and Pan Global 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 Pan Global 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 Pan Global Resources, you can compare the effects of market volatilities on Troilus Gold and Pan Global 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 Pan Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Troilus Gold and Pan Global.

Diversification Opportunities for Troilus Gold and Pan Global

0.5

Correlation Coefficient

Troilus Gold  Pan Global

Very weak diversification

The 3 months correlation between Troilus and Pan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and Pan Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Global 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 Pan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Global Resources has no effect on the direction of Troilus Gold i.e., Troilus Gold and Pan Global go up and down completely randomly.

Pair Corralation between Troilus Gold and Pan Global

Assuming the 90 days horizon Troilus Gold Corp is expected to generate 1.61 times more return on investment than Pan Global. However, Troilus Gold is 1.61 times more volatile than Pan Global Resources. It trades about 0.23 of its potential returns per unit of risk. Pan Global Resources is currently generating about -0.09 per unit of risk. If you would invest  19.00  in Troilus Gold Corp on September 12, 2024 and sell it today you would earn a total of  6.00  from holding Troilus Gold Corp or generate 31.58% return on investment over 90 days.

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

Troilus Gold Corp  vs.  Pan Global 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. Despite nearly stable primary indicators, Troilus Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pan Global Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Global Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Troilus Gold and Pan Global

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

The idea behind Troilus Gold Corp and Pan Global 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.