Correlation Between I 80 and Treasury Metals
Can any of the company-specific risk be diversified away by investing in both I 80 and Treasury Metals 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 Treasury Metals 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 Treasury Metals, you can compare the effects of market volatilities on I 80 and Treasury Metals 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 Treasury Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and Treasury Metals.
Diversification Opportunities for I 80 and Treasury Metals
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IAUX and Treasury is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding I 80 Gold Corp and Treasury Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Metals 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 Treasury Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Metals has no effect on the direction of I 80 i.e., I 80 and Treasury Metals go up and down completely randomly.
Pair Corralation between I 80 and Treasury Metals
Given the investment horizon of 90 days I 80 Gold Corp is expected to under-perform the Treasury Metals. But the stock apears to be less risky and, when comparing its historical volatility, I 80 Gold Corp is 1.03 times less risky than Treasury Metals. The stock trades about -0.03 of its potential returns per unit of risk. The Treasury Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Treasury Metals on August 25, 2024 and sell it today you would earn a total of 4.00 from holding Treasury Metals or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.21% |
| Values | Daily Returns |
I 80 Gold Corp vs. Treasury Metals
Performance |
| Timeline |
| I 80 Gold |
| Treasury Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
I 80 and Treasury Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I 80 and Treasury Metals
The main advantage of trading using opposite I 80 and Treasury Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I 80 position performs unexpectedly, Treasury Metals 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 Treasury Metals will offset losses from the drop in Treasury Metals' 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 |
| Treasury Metals vs. Nulegacy Gold | Treasury Metals vs. Labrador Gold Corp | Treasury Metals vs. Phenom Resources Corp | Treasury Metals vs. Rover Metals 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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