Correlation Between International Tower and Xtra Gold
Can any of the company-specific risk be diversified away by investing in both International Tower and Xtra Gold 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 International Tower and Xtra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Tower Hill and Xtra Gold Resources Corp, you can compare the effects of market volatilities on International Tower and Xtra Gold 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 International Tower with a short position of Xtra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Tower and Xtra Gold.
Diversification Opportunities for International Tower and Xtra Gold
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and Xtra is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding International Tower Hill and Xtra Gold Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtra Gold Resources and International Tower 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 International Tower Hill are associated (or correlated) with Xtra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtra Gold Resources has no effect on the direction of International Tower i.e., International Tower and Xtra Gold go up and down completely randomly.
Pair Corralation between International Tower and Xtra Gold
Assuming the 90 days trading horizon International Tower is expected to generate 1.56 times less return on investment than Xtra Gold. In addition to that, International Tower is 1.96 times more volatile than Xtra Gold Resources Corp. It trades about 0.03 of its total potential returns per unit of risk. Xtra Gold Resources Corp is currently generating about 0.09 per unit of volatility. If you would invest 82.00 in Xtra Gold Resources Corp on September 2, 2024 and sell it today you would earn a total of 97.00 from holding Xtra Gold Resources Corp or generate 118.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Tower Hill vs. Xtra Gold Resources Corp
Performance |
| Timeline |
| International Tower Hill |
| Xtra Gold Resources |
International Tower and Xtra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Tower and Xtra Gold
The main advantage of trading using opposite International Tower and Xtra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Tower position performs unexpectedly, Xtra Gold 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 Xtra Gold will offset losses from the drop in Xtra Gold's long position.| International Tower vs. Xtra Gold Resources Corp | International Tower vs. Loncor Resources | International Tower vs. TRX Gold Corp |
| Xtra Gold vs. Loncor Resources | Xtra Gold vs. Century Global Commodities | Xtra Gold vs. Grosvenor Resource Corp | Xtra Gold vs. Quartz Mountain 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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