Correlation Between Troilus Gold and Meridian Mining

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

Diversification Opportunities for Troilus Gold and Meridian Mining

0.83

Correlation Coefficient

Troilus Gold  Meridian Mining

Very poor diversification

The 3 months correlation between Troilus and Meridian is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and Meridian Mining UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Mining UK 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 Meridian Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Mining UK has no effect on the direction of Troilus Gold i.e., Troilus Gold and Meridian Mining go up and down completely randomly.

Pair Corralation between Troilus Gold and Meridian Mining

Assuming the 90 days trading horizon Troilus Gold is expected to generate 1.01 times less return on investment than Meridian Mining. But when comparing it to its historical volatility, Troilus Gold Corp is 1.04 times less risky than Meridian Mining. It trades about 0.1 of its potential returns per unit of risk. Meridian Mining UK is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Meridian Mining UK on April 24, 2025 and sell it today you would earn a total of  11.00  from holding Meridian Mining UK or generate 17.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Troilus Gold Corp  vs.  Meridian Mining UK

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 abnormal technical and fundamental indicators, Troilus Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Troilus Gold and Meridian Mining

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

The idea behind Troilus Gold Corp and Meridian Mining UK 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.