Correlation Between I 80 and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both I 80 and GoGold 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 I 80 and GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between i 80 Gold Corp and GoGold Resources, you can compare the effects of market volatilities on I 80 and GoGold 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 I 80 with a short position of GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and GoGold Resources.
Diversification Opportunities for I 80 and GoGold Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IAU and GoGold is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding i 80 Gold Corp and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources and I 80 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 i 80 Gold Corp are associated (or correlated) with GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of I 80 i.e., I 80 and GoGold Resources go up and down completely randomly.
Pair Corralation between I 80 and GoGold Resources
Assuming the 90 days trading horizon i 80 Gold Corp is expected to generate 3.46 times more return on investment than GoGold Resources. However, I 80 is 3.46 times more volatile than GoGold Resources. It trades about 0.12 of its potential returns per unit of risk. GoGold Resources is currently generating about -0.3 per unit of risk. If you would invest 63.00 in i 80 Gold Corp on September 18, 2024 and sell it today you would earn a total of 10.00 from holding i 80 Gold Corp or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
i 80 Gold Corp vs. GoGold Resources
Performance |
| Timeline |
| i 80 Gold |
| GoGold Resources |
I 80 and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I 80 and GoGold Resources
The main advantage of trading using opposite I 80 and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I 80 position performs unexpectedly, GoGold 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.The idea behind i 80 Gold Corp and GoGold 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.| GoGold Resources vs. Outcrop Gold Corp | GoGold Resources vs. Strikepoint Gold | GoGold Resources vs. Defiance Silver Corp | GoGold Resources vs. Eskay Mining Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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