Correlation Between Independence Gold and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Independence Gold and Dow Jones 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 Independence Gold and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independence Gold Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Independence Gold and Dow Jones 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 Independence Gold with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Gold and Dow Jones.
Diversification Opportunities for Independence Gold and Dow Jones
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Independence and Dow is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Independence Gold Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Independence Gold 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 Independence Gold Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Independence Gold i.e., Independence Gold and Dow Jones go up and down completely randomly.
Pair Corralation between Independence Gold and Dow Jones
Assuming the 90 days horizon Independence Gold Corp is expected to generate 62.94 times more return on investment than Dow Jones. However, Independence Gold is 62.94 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 5.96 in Independence Gold Corp on August 30, 2024 and sell it today you would earn a total of 10.04 from holding Independence Gold Corp or generate 168.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Independence Gold Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Independence Gold and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Independence Gold Corp
Pair trading matchups for Independence Gold
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Independence Gold and Dow Jones
The main advantage of trading using opposite Independence Gold and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Gold position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Independence Gold vs. Silver Hammer Mining | Independence Gold vs. Reyna Silver Corp | Independence Gold vs. Guanajuato Silver | Independence Gold vs. Silver One Resources |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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