Correlation Between International Tower and Paramount Gold
Can any of the company-specific risk be diversified away by investing in both International Tower and Paramount 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 Paramount 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 Paramount Gold Nevada, you can compare the effects of market volatilities on International Tower and Paramount 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 Paramount Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Tower and Paramount Gold.
Diversification Opportunities for International Tower and Paramount Gold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Paramount is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding International Tower Hill and Paramount Gold Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Gold Nevada 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 Paramount Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Gold Nevada has no effect on the direction of International Tower i.e., International Tower and Paramount Gold go up and down completely randomly.
Pair Corralation between International Tower and Paramount Gold
Considering the 90-day investment horizon International Tower Hill is expected to under-perform the Paramount Gold. In addition to that, International Tower is 1.26 times more volatile than Paramount Gold Nevada. It trades about -0.28 of its total potential returns per unit of risk. Paramount Gold Nevada is currently generating about -0.09 per unit of volatility. If you would invest 43.00 in Paramount Gold Nevada on August 24, 2024 and sell it today you would lose (5.00) from holding Paramount Gold Nevada or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Tower Hill vs. Paramount Gold Nevada
Performance |
| Timeline |
| International Tower Hill |
| Paramount Gold Nevada |
International Tower and Paramount Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Tower and Paramount Gold
The main advantage of trading using opposite International Tower and Paramount Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Tower position performs unexpectedly, Paramount 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 Paramount Gold will offset losses from the drop in Paramount Gold's long position.| International Tower vs. Vista Gold | International Tower vs. Golden Minerals | International Tower vs. Paramount Gold Nevada | International Tower vs. Tanzanian Royalty Exploration |
| Paramount Gold vs. Vista Gold | Paramount Gold vs. International Tower Hill | Paramount Gold vs. Avino Silver Gold | Paramount Gold vs. Seabridge Gold |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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