Correlation Between I 80 and GFG Resources
Can any of the company-specific risk be diversified away by investing in both I 80 and GFG 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 GFG 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 GFG Resources, you can compare the effects of market volatilities on I 80 and GFG 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 GFG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and GFG Resources.
Diversification Opportunities for I 80 and GFG Resources
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between IAUX and GFG is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding I 80 Gold Corp and GFG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFG 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 GFG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFG Resources has no effect on the direction of I 80 i.e., I 80 and GFG Resources go up and down completely randomly.
Pair Corralation between I 80 and GFG Resources
Given the investment horizon of 90 days I 80 Gold Corp is expected to under-perform the GFG Resources. In addition to that, I 80 is 1.28 times more volatile than GFG Resources. It trades about -0.03 of its total potential returns per unit of risk. GFG Resources is currently generating about 0.05 per unit of volatility. If you would invest 8.44 in GFG Resources on August 25, 2024 and sell it today you would earn a total of 2.56 from holding GFG Resources or generate 30.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I 80 Gold Corp vs. GFG Resources
Performance |
| Timeline |
| I 80 Gold |
| GFG Resources |
I 80 and GFG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I 80 and GFG Resources
The main advantage of trading using opposite I 80 and GFG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I 80 position performs unexpectedly, GFG 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 GFG Resources will offset losses from the drop in GFG Resources' 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 |
| GFG Resources vs. Japan Gold Corp | GFG Resources vs. Robex Resources | GFG Resources vs. Rover Metals Corp | GFG Resources vs. Orefinders Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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