Correlation Between Alkane Resources and IAMGold
Can any of the company-specific risk be diversified away by investing in both Alkane Resources and IAMGold 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 Alkane Resources and IAMGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkane Resources Limited and IAMGold, you can compare the effects of market volatilities on Alkane Resources and IAMGold 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 Alkane Resources with a short position of IAMGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkane Resources and IAMGold.
Diversification Opportunities for Alkane Resources and IAMGold
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alkane and IAMGold is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alkane Resources Limited and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold and Alkane Resources 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 Alkane Resources Limited are associated (or correlated) with IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of Alkane Resources i.e., Alkane Resources and IAMGold go up and down completely randomly.
Pair Corralation between Alkane Resources and IAMGold
Assuming the 90 days horizon Alkane Resources Limited is expected to generate 2.18 times more return on investment than IAMGold. However, Alkane Resources is 2.18 times more volatile than IAMGold. It trades about 0.07 of its potential returns per unit of risk. IAMGold is currently generating about 0.07 per unit of risk. If you would invest 26.00 in Alkane Resources Limited on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Alkane Resources Limited or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alkane Resources Limited vs. IAMGold
Performance |
| Timeline |
| Alkane Resources |
| IAMGold |
Alkane Resources and IAMGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkane Resources and IAMGold
The main advantage of trading using opposite Alkane Resources and IAMGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkane Resources position performs unexpectedly, IAMGold 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 IAMGold will offset losses from the drop in IAMGold's long position.| Alkane Resources vs. Arafura Resources | Alkane Resources vs. Great Western Minerals | Alkane Resources vs. Greenland Minerals And | Alkane Resources vs. Ucore Rare Metals |
| IAMGold vs. Eldorado Gold Corp | IAMGold vs. Coeur Mining | IAMGold vs. Gold Resource | IAMGold vs. Alamos Gold |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |