Correlation Between Troilus Gold and Labrador Iron

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

Diversification Opportunities for Troilus Gold and Labrador Iron

0.55

Correlation Coefficient

Troilus Gold  Labrador Iron

Very weak diversification

The 3 months correlation between Troilus and Labrador is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Troilus Gold Corp and Labrador Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Iron Ore 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 Labrador Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Iron Ore has no effect on the direction of Troilus Gold i.e., Troilus Gold and Labrador Iron go up and down completely randomly.

Pair Corralation between Troilus Gold and Labrador Iron

Assuming the 90 days horizon Troilus Gold Corp is expected to generate 2.9 times more return on investment than Labrador Iron. However, Troilus Gold is 2.9 times more volatile than Labrador Iron Ore. It trades about 0.27 of its potential returns per unit of risk. Labrador Iron Ore is currently generating about 0.05 per unit of risk. If you would invest  50.00  in Troilus Gold Corp on July 6, 2025 and sell it today you would earn a total of  40.00  from holding Troilus Gold Corp or generate 80.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Troilus Gold Corp  vs.  Labrador Iron Ore

Troilus Gold Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Troilus Gold Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Troilus Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Labrador Iron Ore

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Labrador Iron Ore are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Labrador Iron is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Troilus Gold and Labrador Iron

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

The idea behind Troilus Gold Corp and Labrador Iron Ore 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.