Correlation Between IAMGold and International Tower
Can any of the company-specific risk be diversified away by investing in both IAMGold and International Tower 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 IAMGold and International Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAMGold and International Tower Hill, you can compare the effects of market volatilities on IAMGold and International Tower 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 IAMGold with a short position of International Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGold and International Tower.
Diversification Opportunities for IAMGold and International Tower
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IAMGold and International is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and International Tower Hill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Tower Hill and IAMGold 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 IAMGold are associated (or correlated) with International Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Tower Hill has no effect on the direction of IAMGold i.e., IAMGold and International Tower go up and down completely randomly.
Pair Corralation between IAMGold and International Tower
Considering the 90-day investment horizon IAMGold is expected to generate 0.93 times more return on investment than International Tower. However, IAMGold is 1.07 times less risky than International Tower. It trades about 0.2 of its potential returns per unit of risk. International Tower Hill is currently generating about -0.02 per unit of risk. If you would invest 558.00 in IAMGold on November 3, 2024 and sell it today you would earn a total of 66.00 from holding IAMGold or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
IAMGold vs. International Tower Hill
Performance |
| Timeline |
| IAMGold |
| International Tower Hill |
IAMGold and International Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAMGold and International Tower
The main advantage of trading using opposite IAMGold and International Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold position performs unexpectedly, International Tower 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 International Tower will offset losses from the drop in International Tower's long position.| IAMGold vs. Eldorado Gold Corp | IAMGold vs. Coeur Mining | IAMGold vs. Gold Resource | IAMGold vs. Alamos Gold |
| International Tower vs. Vista Gold | International Tower vs. Paramount Gold Nevada | International Tower vs. Tanzanian Royalty Exploration |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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