Correlation Between Trilogy Metals and Westwater Resources

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

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

Diversification Opportunities for Trilogy Metals and Westwater Resources

0.68

Correlation Coefficient

Trilogy Metals  Westwater Resources

Poor diversification

The 3 months correlation between Trilogy and Westwater is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Trilogy Metals and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater Resources and Trilogy Metals 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 Trilogy Metals are associated (or correlated) with Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of Trilogy Metals i.e., Trilogy Metals and Westwater Resources go up and down completely randomly.

Pair Corralation between Trilogy Metals and Westwater Resources

Considering the 90-day investment horizon Trilogy Metals is expected to generate 19.8 times less return on investment than Westwater Resources. But when comparing it to its historical volatility, Trilogy Metals is 1.34 times less risky than Westwater Resources. It trades about 0.01 of its potential returns per unit of risk. Westwater Resources is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Westwater Resources on May 5, 2025 and sell it today you would earn a total of  25.00  from holding Westwater Resources or generate 51.02% return on investment over 90 days.

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

Trilogy Metals  vs.  Westwater Resources

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.

Westwater Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Westwater Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Westwater Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trilogy Metals and Westwater Resources

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

The idea behind Trilogy Metals and Westwater Resources 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 Stocks Directory module to find actively traded stocks across global markets.