Correlation Between I 80 and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both I 80 and Gold Reserve 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 Gold Reserve 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 Gold Reserve, you can compare the effects of market volatilities on I 80 and Gold Reserve 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 Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and Gold Reserve.
Diversification Opportunities for I 80 and Gold Reserve
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IAUX and Gold is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding I 80 Gold Corp and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve 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 Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of I 80 i.e., I 80 and Gold Reserve go up and down completely randomly.
Pair Corralation between I 80 and Gold Reserve
Given the investment horizon of 90 days I 80 Gold Corp is expected to under-perform the Gold Reserve. In addition to that, I 80 is 1.26 times more volatile than Gold Reserve. It trades about -0.03 of its total potential returns per unit of risk. Gold Reserve is currently generating about 0.0 per unit of volatility. If you would invest 292.00 in Gold Reserve on August 26, 2024 and sell it today you would lose (84.00) from holding Gold Reserve or give up 28.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
I 80 Gold Corp vs. Gold Reserve
Performance |
| Timeline |
| I 80 Gold |
| Gold Reserve |
I 80 and Gold Reserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I 80 and Gold Reserve
The main advantage of trading using opposite I 80 and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I 80 position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.| I 80 vs. K92 Mining | I 80 vs. Wesdome Gold Mines | I 80 vs. Fortuna Silver Mines | I 80 vs. Sandstorm Gold Ltd |
| Gold Reserve vs. Monarch Mining | Gold Reserve vs. Lundin Gold | Gold Reserve vs. Liberty Gold Corp | Gold Reserve vs. Minera Alamos |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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