Correlation Between Meridian Mining and Troilus Gold

Can any of the company-specific risk be diversified away by investing in both Meridian Mining and Troilus 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 Meridian Mining and Troilus Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meridian Mining UK and Troilus Gold Corp, you can compare the effects of market volatilities on Meridian Mining and Troilus 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 Meridian Mining with a short position of Troilus Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Mining and Troilus Gold.

Diversification Opportunities for Meridian Mining and Troilus Gold

0.84

Correlation Coefficient

Meridian Mining  Troilus Gold

Very poor diversification

The 3 months correlation between Meridian and Troilus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Mining UK and Troilus Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troilus Gold Corp and Meridian Mining 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 Meridian Mining UK are associated (or correlated) with Troilus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troilus Gold Corp has no effect on the direction of Meridian Mining i.e., Meridian Mining and Troilus Gold go up and down completely randomly.

Pair Corralation between Meridian Mining and Troilus Gold

Assuming the 90 days trading horizon Meridian Mining UK is expected to generate 1.02 times more return on investment than Troilus Gold. However, Meridian Mining is 1.02 times more volatile than Troilus Gold Corp. It trades about 0.1 of its potential returns per unit of risk. Troilus Gold Corp is currently generating about 0.09 per unit of risk. If you would invest  64.00  in Meridian Mining UK on April 20, 2025 and sell it today you would earn a total of  12.00  from holding Meridian Mining UK or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Meridian Mining UK  vs.  Troilus Gold Corp

Meridian Mining UK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Meridian Mining UK are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Meridian Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Troilus Gold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Troilus Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Troilus Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meridian Mining and Troilus Gold

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

The idea behind Meridian Mining UK and Troilus Gold Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.