Correlation Between Nouveau Monde and Trilogy Metals

Can any of the company-specific risk be diversified away by investing in both Nouveau Monde and Trilogy Metals 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 Nouveau Monde and Trilogy Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nouveau Monde Graphite and Trilogy Metals, you can compare the effects of market volatilities on Nouveau Monde and Trilogy Metals 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 Nouveau Monde with a short position of Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nouveau Monde and Trilogy Metals.

Diversification Opportunities for Nouveau Monde and Trilogy Metals

0.5

Correlation Coefficient

Nouveau Monde  Trilogy Metals

Very weak diversification

The 3 months correlation between Nouveau and Trilogy is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nouveau Monde Graphite and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy Metals and Nouveau Monde 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 Nouveau Monde Graphite are associated (or correlated) with Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Nouveau Monde i.e., Nouveau Monde and Trilogy Metals go up and down completely randomly.

Pair Corralation between Nouveau Monde and Trilogy Metals

Considering the 90-day investment horizon Nouveau Monde Graphite is expected to generate 1.03 times more return on investment than Trilogy Metals. However, Nouveau Monde is 1.03 times more volatile than Trilogy Metals. It trades about 0.01 of its potential returns per unit of risk. Trilogy Metals is currently generating about 0.01 per unit of risk. If you would invest  184.00  in Nouveau Monde Graphite on May 6, 2025 and sell it today you would lose (7.00) from holding Nouveau Monde Graphite or give up 3.8% of portfolio value over 90 days.

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

Nouveau Monde Graphite  vs.  Trilogy Metals

Nouveau Monde Graphite

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nouveau Monde Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Nouveau Monde is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Trilogy Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trilogy Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Trilogy Metals is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nouveau Monde and Trilogy Metals

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

The idea behind Nouveau Monde Graphite and Trilogy Metals 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.