Correlation Between Troilus Gold and First Mining

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

Diversification Opportunities for Troilus Gold and First Mining

0.75

Correlation Coefficient

Troilus Gold  First Mining

Poor diversification

The 3 months correlation between Troilus and First is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold 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 First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Troilus Gold i.e., Troilus Gold and First Mining go up and down completely randomly.

Pair Corralation between Troilus Gold and First Mining

Assuming the 90 days trading horizon Troilus Gold Corp is expected to generate 0.58 times more return on investment than First Mining. However, Troilus Gold Corp is 1.71 times less risky than First Mining. It trades about 0.1 of its potential returns per unit of risk. First Mining Gold is currently generating about 0.04 per unit of risk. If you would invest  57.00  in Troilus Gold Corp on April 24, 2025 and sell it today you would earn a total of  11.00  from holding Troilus Gold Corp or generate 19.3% return on investment over 90 days.

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

Troilus Gold Corp  vs.  First Mining Gold

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 8 (%) 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.

First Mining Gold

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Mining Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, First Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Troilus Gold and First Mining

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

The idea behind Troilus Gold Corp and First Mining Gold 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.