Correlation Between Infinico Metals and Gold79 Mines
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and Gold79 Mines 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 Infinico Metals and Gold79 Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinico Metals Corp and Gold79 Mines, you can compare the effects of market volatilities on Infinico Metals and Gold79 Mines 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 Infinico Metals with a short position of Gold79 Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and Gold79 Mines.
Diversification Opportunities for Infinico Metals and Gold79 Mines
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infinico and Gold79 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Gold79 Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold79 Mines and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Gold79 Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold79 Mines has no effect on the direction of Infinico Metals i.e., Infinico Metals and Gold79 Mines go up and down completely randomly.
Pair Corralation between Infinico Metals and Gold79 Mines
Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the Gold79 Mines. In addition to that, Infinico Metals is 2.03 times more volatile than Gold79 Mines. It trades about -0.17 of its total potential returns per unit of risk. Gold79 Mines is currently generating about 0.15 per unit of volatility. If you would invest 28.00 in Gold79 Mines on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Gold79 Mines or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Infinico Metals Corp vs. Gold79 Mines
Performance |
| Timeline |
| Infinico Metals Corp |
| Gold79 Mines |
Infinico Metals and Gold79 Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and Gold79 Mines
The main advantage of trading using opposite Infinico Metals and Gold79 Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, Gold79 Mines 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 Gold79 Mines will offset losses from the drop in Gold79 Mines' long position.The idea behind Infinico Metals Corp and Gold79 Mines 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.| Gold79 Mines vs. First Majestic Silver | Gold79 Mines vs. Ivanhoe Energy | Gold79 Mines vs. Orezone Gold Corp | Gold79 Mines vs. Faraday Copper 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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