Correlation Between Triple Flag and Premium Income

Can any of the company-specific risk be diversified away by investing in both Triple Flag and Premium Income 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 Triple Flag and Premium Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Triple Flag Precious and Premium Income, you can compare the effects of market volatilities on Triple Flag and Premium Income 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 Triple Flag with a short position of Premium Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and Premium Income.

Diversification Opportunities for Triple Flag and Premium Income

0.65

Correlation Coefficient

Triple Flag  Premium Income

Poor diversification

The 3 months correlation between Triple and Premium is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Income and Triple Flag 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 Triple Flag Precious are associated (or correlated) with Premium Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Income has no effect on the direction of Triple Flag i.e., Triple Flag and Premium Income go up and down completely randomly.

Pair Corralation between Triple Flag and Premium Income

Assuming the 90 days trading horizon Triple Flag is expected to generate 3.02 times less return on investment than Premium Income. In addition to that, Triple Flag is 1.66 times more volatile than Premium Income. It trades about 0.09 of its total potential returns per unit of risk. Premium Income is currently generating about 0.43 per unit of volatility. If you would invest  459.00  in Premium Income on April 23, 2025 and sell it today you would earn a total of  194.00  from holding Premium Income or generate 42.27% return on investment over 90 days.

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

Triple Flag Precious  vs.  Premium Income

Triple Flag Precious

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Triple Flag Precious are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Triple Flag may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Premium Income

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Premium Income are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Premium Income unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triple Flag and Premium Income

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

The idea behind Triple Flag Precious and Premium Income 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.